And the trick to developing a best-in-class marketing budget is, first, to form a new conceptualization of what marketing is; then, to know the correct budget type for your growth stage; and, finally, to understand the power of stretch budgets. High-performers don't have that issue, because their executives have a better understanding of what it takes to be a high-performing marketing organizing. If your executive team can give you full support on those four ideas, and not just that they need more marketing, then you have change at getting a best-in-class marketing budget. The best marketing budgets match your growth stage Once the executive team has bought into the new understanding of marketing, it's time to begin setting your actual budget. In a conversation, Uberflip's (now former) VP of marketing, Hana Abaza (now head of marketing at Shopify), noted that she prefers to look at "percentage of revenue target" for setting the company's budget rather than percentage of gross revenue. Doing so allows her to keep her budget in line with what the projections are, rather than what the current revenue is, she said. The final key to best-in-class marketing budgets, therefore, is their ability to change with their environment. The trick to creating a flexible budget is to have the necessary conversations up front. A good approach is to start with a predefined number, say 50%, so that if you ever run a campaign that performs 50% better than its goal, you are instantly allowed to access the flex budget to double-down on the campaign or idea. * * * If you can follow these three keys to setting up best-in-class marketing budgets, you are well on your way to becoming a high-performing marketing organization.
Budgets aren’t sexy, but they are one of the major prerequisites of high-performing marketing organizations.
And the trick to developing a best-in-class marketing budget is, first, to form a new conceptualization of what marketing is; then, to know the correct budget type for your growth stage; and, finally, to understand the power of stretch budgets.
If you can master those three keys, you’ll create a best-in-class marketing budget—and be well on your way to marketing success.
1. The best marketing budgets start with new ideas about what Marketing is
It’s no surprise that high-performing marketers average 14 marketing tools, double that of underperformers, according to the State of Marketing 2017 report by Salesforce. Moreover, high-performing marketing organizations plan to increase their spending on tools and technology in the coming year, the report also found.
So, those high-performers have not only larger budgets already but also plans to grow those budgets significantly still.
Best-in-class marketing budgets don’t just happen; the highest levels of the business support them. We have all tried to ask for more money—only to be told “no.” High-performers don’t have that issue, because their executives have a better understanding of what it takes to be a high-performing marketing organizing.
In short, they understand marketing and best-in-class marketing budgets aren’t what they used to be.
And without the adoption of current ideas about marketing—without a new conceptualization of marketing—your organization will be stuck with an old budget from a different marketing era.
Accordingly, executives must first by into these four tenets of modern marketing:
- Marketing is no longer a siloed department.
- The new consumer is not like the old.
- Marketing has an enormously larger role and scope.
- Technology is the only way to scale modern marketing efforts.
If your executive team can give you full support on those four ideas, and not just that they need more marketing, then you have change at getting a best-in-class marketing budget. If they cannot, they will expect you to be a magician, not a marketer.
Make sure you know the difference between those differing expectations, so you know when it’s time to leave!
2. The best marketing budgets match your growth stage
Once the executive team has bought into the new understanding of marketing, it’s time to begin setting your actual budget.
The biggest factor determining your best-in-class budget is your business’s growth stage: Companies that are stable and looking only to maintain their position in a market should have a budget that’s very different from the budgets of those that are looking for very…
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