Updated from December 12, 2019
Above All, Be Agile
As the quarantine began in spring 2020, we noticed a big pause. Not all companies, but many called a time out, took a breath, and tried to gain an understanding of the landscape.
In 2021, goals are unsure. Change is the only constant. With new variants of COVID-19, accelerated vaccine distribution, a new administration in Washington, and a surge of technological innovations that would've taken years, your biggest budget challenge will be flexibility.
You may have always set quarterly goals and tracked your budget accordingly. In order to win, you may need to look at monthly goals and create a cadence of recalibration throughout the year.
The following points provide a logical flow for marketing budget planning. Apply this logic in your agile world order.
Align Your Budget with Company and Sales Strategies
Budgeting is a strategic activity but many approach it with a tactic: entering numbers on a spreadsheet.
As a result, when your executive team needs to sign off on the marketing budget you may find yourself having in-depth conversations with non-marketers about the value of LinkedIn ads versus pay-per-click versus industry publication ads. This is not fun and, most of the time, unproductive.
Focus your marketing budget conversations on strategy.
Instead, focus your marketing budget conversations on strategy. Prepare the marketing strategy, rationale, goals behind the marketing plan — providing the detailed “why” of the marketing budget. This topic should be the focus of executive budgeting conversations and is a more productive.
Start by saying something like, “We agree that we desire to increase traffic by 11%. Increased traffic will contribute to [other goals]. In order to do, the best tactics have proven to be [a] and [b]. We need to allocate $X to increased traffic.”
Creating and advocating for your marketing budget requires several key components that you may have overlooked. When developing your budget for 2020, it’s important to answer these questions:
- What is my company’s strategy?
- How much do we want to grow?
- From what areas do we need the most growth?
With those answers in hand, move on to:
- Who’s in my target audience?
- How do I need to contribute to the sales pipeline?
These strategic questions lay the groundwork for annual marketing planning. With these answers, you can develop a marketing budget that is thoughtful, defendable, and effective.
Invest Based on Data
No other company is like yours. Looking to industry benchmarks is helpful, but knowing the return on investment for your own efforts from the previous year matters most. Which efforts produced the most results? Which ones flopped? Where are the holes from the previous year (or two)?
As you head into the new year, look back at the last 12 months and evaluate:
- How much was spent?
- Can we or do we expect to spend more or less than last year?
- What percentage of my overall budget went into the different categories?
- Which fixed and operational costs are going up?
- Which investments are going to generate the greatest impact?
In order to answer the last question, look to your KPIs. If you haven’t built KPIs, we have a helpful guide that can help retroactively and proactively build KPIs.
The challenging aspect of leveraging data is that marketing isn’t a simple “we invested and then it didn’t work as intended and should be abandoned.” Many marketing tactics require time, repetition, and adjustments for long-term success. When time, repetition, and adjustments occur, results happen. But if they don’t, it may be time to try something else.
Further, as a B2B tech marketing executive, make sure you’re consulting with your team on the front lines. Even if you consider yourself to be a plugged in and up to date CMO, those laser-focused on individual disciplines are going to have different perspectives than your 30,000 foot view. You need their insight about what to adjust and what to throw away.
A percentage of your 2020 budget needs to be dedicated to experimenting. This is where the art and science of marketing intersect. You keep up with what’s going on in the industry, you know you need to improve an area — this is the budget you use to find creative ways to improve an aspect of marketing. If you’re not sure where to experiment, read this blog article to make sure that at least, you’ve implemented the Eight Statistically Proven Priorities for B2B Tech Marketing.
There are always technology options to explore. After implementing and refining processes for foundational CRM, marketing automation, and SEO and marketing dashboards, look for ways to enhance performance through technology and automation.
Advertising is ripe for experimentation. Trying ads on LinkedIn in a new way you haven’t before (or trying them for the first time), testing new approaches for PPC, choosing 2-3 industry publications, and identifying different sponsorships to see what drives leads. Track performance quarterly to identify winners and losers, keeping an eye on the long-term results. A few clicks on one advertising channel that convert to opportunities, then revenue are more valuable for lead generation than ads that generate numerous clicks but no leads.
Customer experience (CX) and the use of data to personalize the buying experience is another area to explore. As our CEO, John Farkas described in a recent blog, “CX leverages technology, people, and workflows to deliver personalized experiences to individuals who interact with your brand so that, no matter the platform or touchpoint, customers receive exceptional service.” The 2020 Data-Driven Marketing & Advertising Outlook by Dun & Bradstreet reinforces the importance of integrated experiences, “B2B buyers want their vendors to anticipate their needs, make relevant suggestions and deliver the right level of engagement across the entire buying journey.” As you consider where to experiment, explore how to enhance CX.
CX leverages technology, people, and workflows to deliver personalized experiences to individuals who interact with your brand so that, no matter the platform or touchpoint, customers receive exceptional service.
When Wise Trimming is Needed
The unfortunate reality is that you may be asked to cut the marketing budget. A cost reduction will require creative problem solving to maintain — and even drive — growth. When trimming the marketing budget, ask:
- What do we need to keep so we continuing to generate leads and impact revenue?
- How can we better support the entire sales process?
- What is not working as well as anticipated?
- Where can a vendor lower cost, at least in the short term?
Any time you’re cutting, adjust your vision and your roadmap. Don’t take a “more bricks, less straw” approach. If you cut your spend, you’ve got to cut your KPIs and communicate the change across the team.
The First Thing to Do After Reading this Article
Give yourself 30 minutes alone with your budget on your screen and ask:
- Is our team aligned with our company’s strategies and goals?
- Are we investing more in the marketing tactics that worked?
- How can we experiment in order to increase brand awareness and lead generation?