How to Survive Your Next Marketing Budget Review
Nothing strikes fear like your next budget review.
But if you’re determined to give your marketing budget a better chance at surviving unscathed, you need to know how to prepare. Consider the mid-year or annual marketing budget review as a crucial opportunity to tell your story to your target audience. Only this time, that audience is your executive team. And as marketers understand, success hinges on knowing your audience. For insight on what your CFO and CMO are looking for, consider these insider tips on how to approach your upcoming marketing budget review:
1. Opt for Frequent Feedback Cycles
Whether you’re preparing for annual budget decisions or a mid-year review, the goal remains consistent: Justify the spend with results to date. The closer you can tie results to your actual spend, the better. And that’s where the challenge lies: How do you determine what ultimately generates traffic, leads and sales?
Pulling together the right data to make that connection is essential. This can be difficult if your team is only in data-gathering mode twice a year. If that’s the case, it’s time to think about upgrading your reporting process. More frequent feedback cycles of one to three months offer an advantage by providing a clearer link between marketing activity and results. If you can go back, as often as is practical, and link your team’s work to outcomes achieved, then your annual and mid-year budget review preparations are merely a matter of compiling the information you already have.
KEY QUESTIONS TO ANSWER:
- Where did your impressions and leads come from?
- What’s driving your marketing spend?
- How frequently are you measuring and reporting?
2. Set Clear Expectations
The tools and resources you use to deploy and execute marketing — such as specialized software or services — are valuable inasmuch as they serve to meet established goals. Some may drive leads directly. Other tools may play a role in building Brand awareness and Brand equity. The mid-year and annual marketing budget reviews are opportunities to take a closer look. It’s important to understand what tools and resources you’re using, why you’re using them, and what benefits they bring. Not everything is going to deliver a direct, quantifiable return on investment. And in those cases, where benefits are qualitative, put that into context for your executive team and demonstrate the value they provide.
Whatever the case, it’s important to set clear expectations. If your marketing spend includes essential tools and resources, you should be able to show how they contribute to driving engagement, traffic and leads. If you’re asking for an upgrade, make sure expectations are clear from the start.
KEY QUESTIONS TO ANSWER:
- What are the tools and resources essential to marketing?
- How will they be used?
- What benefits do they offer?
- How will those benefits be measured quantitatively or qualitatively?
3. Justify Any Shifts in Your Spend
If you are proposing any shifts in your marketing budget, such as moving funds from one line item to another, be prepared to justify them for your next budget review. This is where having a more frequent feedback cycle really comes in handy. That’s because frequent feedback cycles force your team to examine, explain and clarify decisions and outcomes as they happen. One thing to keep in mind, if money is moving from one allocated area to another, it’s a red flag. Count on your executive team to question the move.
KEY QUESTION TO ANSWER:
- If you don’t need the funds where we allocated them, why don’t we move those funds to another part of the business?
4. The More Meaningful Data, the Better
Data tells a story. And the more data the better. But to be effective, you need the right kind of data to show what’s in your funnel and how things are performing, based on the length of your company’s sales cycle. It’s not merely about showcasing successful marketing programs or initiatives. And it’s not only about Marketing Qualified Leads (MQLs). For your executive team, it’s ultimately about sales. Using data to trace the journey from marketing costs, tactics and achievements, to desired outcomes (impressions and leads), to actual sales is an effective way to define the value of your marketing spend.
KEY QUESTIONS TO ANSWER:
- How did marketing perform?
- How does the actual performance compare to expectations?
- How do the different tactics and tools you use compare to one another, in terms of measurable outcomes?
Remember: Your CFO and your CMO are numerically minded. You want to show up with data to illustrate in a clear and honest way what’s working, what’s not working, lessons learned and the plan moving forward.
Generally speaking, budgets tend to get trimmed if a team isn’t performing or if the company overall isn’t performing. Sometimes it’s an industry-wide issue. Sometimes it’s about how well your company is faring against competitors. Whatever the case, it’s important to take responsibility and be accountable for decisions made and results achieved. From the vantagepoint of executives making tough decisions, those who can illustrate their story with data tend to find themselves in a stronger position than those who can’t.