There’s little doubt that the budget is at the core of marketing’s operation, and by extension, the entire organization’s success. The money available for marketing projects and campaigns is the catalyst that has the power to transform business goals into outcomes, and getting the budget right is the critical preparational step for ensuring your 2020 sales and marketing funnel is finely tuned, polished, and locked onto leads that will generate measurable business outcomes. From our extensive experience working with SMBs, we’ve identified a fully fleshed-out budget that is clearly linked to Key Performance Indicators (KPIs) for the entire business as the ideal course of action for most companies. However, most companies don’t create such a budget.
The typical reason companies forego a formal budget, and decide that white-knuckling their marketing spend is more desirable (or merely feasible), is the enormous resource investment a comprehensive KPI-oriented budget plan represents. The choice marketing leaders often face at the budget-planning stage at the end of the year is simple: tune the budget to measurable business outcomes now or start the new year with a bare-bones plan and trust that marketing activities in 2020 will pan out and demonstrate the criticality of marketing’s activities to the business. We understand the dynamics of that dilemma, and it’s our business to help warp the pros and cons in a firm’s favor so that the choice is no longer a dilemma.
Weighing Pros and Cons
If the choice between these two approaches were simple, companies wouldn’t have to weigh the pros and cons. Unfortunately for many marketing leaders, the dynamics of the dilemma are so warped against them that the choice is easy: go with a straightforward budget plan and hope for the best. The key factor of limited bandwidth makes creating a budget that is aligned from the beginning a no-go.
For marketing teams less challenged by bandwidth limitations, each of the aforementioned approaches to planning the marketing budget still have their pros and cons, and it can be difficult to make a decision between them. Starting with just the basics offers enormous flexibility to adjust the plan as the year evolves, adding and cutting events, campaigns, and projects as needed. In addition, starting off without all the “t”s crossed takes the end-of-year planning pressure off and allows marketing leadership the bandwidth to fulfill present obligations, ending the current year strong. The other side of the coin is a major downside to developing a comprehensive budget plan in advance: the sheer bandwidth it takes to put it together. In our experience, this is also the main reason most firms don’t create a budget that comprehensively aligns with business outcomes. It’s not because they judge it a less ideal course of action. Instead, they simply don’t have the time to dive into the minutiae.
On top of these factors, marketing teams may also ask themselves:
- If we do create a KPI-linked budget plan, do we have the perspective to evaluate whether it will work the way we expect?
- Will a comprehensive plan be too rigid to account for unforeseen events?
- Do we have the ongoing time and energy to maintain a comprehensive plan as unforeseen events arise?
Simply asking these questions requires a degree of perspective and experience that not all marketing teams will have at their disposal, making the problems of perspective and follow-through hidden pitfalls to the KPI-oriented budget plan. These are important questions to ask, and if you’re considering undertaking the process of creating a complex, highly-tuned, and results-oriented budget plan, you should be asking yourself these questions.
The other option of creating a comprehensive, performance-linked budget can put the pressure on marketing leadership in the sphere of bandwidth, but it can also take the pressure off in another key area. Marketing and it’s related sub-activities, like PR, hold the lamentable position of being difficult to justify expenditures into members of company leadership who don’t have a marketing background. For example, sales can be tempted to get the impression that they would do OK without the help of marketing, and engineers can be tempted by the notion that their product is self-evidently exceptional. As marketing practitioners, we understand the value we offer, and we also understand that it’s often our responsibility to make that value absolutely apparent to our fellow decision-makers.
By creating a rationalized budget that is directly linked to measurable results, marketing leaders have the best opportunity to make their case to the executive leadership. By maintaining a rational, measurable and results-oriented approach, they also have the greatest opportunity to deliver those results.
Warping the Dilemma in Your Favor
If the budget approach we’ve outlined above isn’t followed by many marketing teams, either they’ve calculated the pros and cons differently or they’re opting out due to that one, looming con: bandwidth. How are we going to find the resources to create a budget plan that accurately maps to business outcomes and maintain that plan throughout the year? Looming in the background are the hidden questions: How do we know we’re doing this right and that the results will really align with our plan?
At Expert Marketing Advisors, our goal is to neutralize those cons by providing the bandwidth and expertise required to make a fully fleshed-out, results-linked marketing budget a reality. Our purpose is to arm you with evidence that your marketing vision is tied to business outcomes and the plan you will use to create and execute your marching orders throughout the year. In the course of our combined experience, we’ve worked with countless SMBs to develop budget plans, giving us the perspective that is usually impossible to get from within the organization. We’ve become experts at circumnavigating the hidden pitfalls a comprehensive marketing plan poses, and we’re ready to offer the fruits of our trials to your marketing effort.
We hope that as you’re evaluating how to approach your 2020 budget, we’ve helped you make the pros and cons of each of your options clearer—and we hope you choose to create a budget plan that will best showcase your marketing vision.