The Mid-Year Budget Review: Proactive with the Facts


Are you in danger of missing revenue projections at the mid-year point?


If so, your marketing budget is in jeopardy.  The reasoning is straightforward.  If marketing can’t effectively spend its budget to produce leads invest marketing’s budget elsewhere.


What if you could save your budget or at least minimize cuts?  


In our experience, successful CMOs protect their budget with a fact-based approach. When cuts are necessary, savvy CMO’s use a pre-emptive approach to minimize them.


In this post, we’ll show you a playbook for presenting your budget with the facts.  We’ll also give you a few quick ways to pre-empt the cost cutting conversation and protect your budget.



Successful CMOs protect their budget with a fact-based approach Control the Budget Review By Arming Yourself With the Facts

Before budget cuts are discussed, it’s helpful to review expectations, results, and possible consequences of marketing budget reductions.


  1. Remind all of expectations. Marketing is responsible for creating qualified leads. Sales has the responsibility to close those leads and generate revenue. Marketing is not responsible for generating revenue or closing on business.


  2. Present contributions to the funnel. What were Marketing’s specific contributions to the sales funnel? Since generic leads are almost meaningless, prepare to review the number and types of leads provided:


    1. By buyer personas


    2. By market segmentation


    3. By deal size



  3. Examine time frames.


    1. What was the elapsed time from Marketing qualified lead to Sales qualified opportunity?


    2. How long did it take for a Sales qualified opportunity to close?



  4. Examine the close rates. Has the rate changed? Dig deep to determine why and at what point deals have crumbled.


  5. Review program spends. Demonstrate results of program spends and resulting adjustments when investments fell through.



Preparing for Cuts: The Dos and Don’ts 

You’ve done the homework. Unfortunately, it looks like you might have to decrease your spend in the second half of the year. Before specific cuts are considered, revisit the organization’s and marketing’s strategic plan so that potential cuts impact those goals the least.


In addition, guard against short-term fixes with adverse long-term implications. It’s no secret that new customers take much longer to close than existing customers. In a rush to increase revenue, it may be tempting to pull all resources and assign them to work on existing customers. While this will likely increase revenue in the short term, the results seriously affect the long-term pipeline. If you lose momentum with potential customers, how long will it take to recover those relationships?


You’ve put a lot of thought into all of the implications that cuts will bring. Be sure to go into the review meeting prepared for discussions. Since you’ve done the work, it makes sense for you to recommend specific cuts. You don’t want someone else to decide on reductions without the benefit of your thorough analysis.


So how will you prioritize cuts?


  1. Reduce or eliminate non-program spend. If it’s not directly contributing to revenue growth, add it to the cut list. This includes items like conventions and sales kickoff meetings.


  2. Dial back third-party spend. Open contracts for recompetes.  Eliminate expensive swag. Forego expensive software.


  3. Reduce program spend. Delay campaign starts. Stretch out campaigns to another quarter.



Consider this:


Download our Marketing Project Prioritization Tool.  Use this spreadsheet to score your projects and assign priorities.   From here you can make a decision about which projects to trim or cut.  Download it here.



Finally, be sure to document the expected results and consequences of the cuts. Ensure complete understanding that cuts will adversely affect planned revenue and other metrics.


Lessons Learned for Next Year: Sales and Operational Planning and Reporting 

No one wants to go through the operational and sales planning process anticipating budget cuts. Realistically, though, it’s better to prepare for cuts and never need the information. Without the detailed plan, analyzing results to make rational budget cuts is almost impossible. So when you develop your operating and sales plan prior to the fiscal year start, plan down to the level that makes analysis possible.


For example, let’s say you expect to adjust spend based on sales by persona. You’ve identified your most lucrative sales are to the client CFO. In order to cut your budget without affecting sales to CFOs,  you’ll need to complete your sales plan down to the persona level.


Once you’ve planned to the level required, it’s important to build and automate reporting so that results map to your plan criteria. Without reporting, it’s impossible to tell if plan assumptions prove out.


Planning and reporting down to the budget-level required is time-consuming and expensive.  But having those results make it possible for the CMO to make strategic decisions. Without relevant reporting, the CMO is just a custodian of the reports..


If mid-year results are not as expected, you might be one of many defending the spend. You’ll  have a better chance of holding on to your budget by taking a proactive, fact-based approach. If cuts are still needed, consider the prioritization presented here. And next year, plan your budget with enough detail to make valid decisions. Build reporting to correspond to your budget to drive decision-making throughout the year.


Mike Drapeau

Makes data and analysis come alive so clients can understand the “what” and “why” and design solutions that fit the environment.

Once the leader of SBI Delivery, Mike is now head of the firm’s internal talent development, so he has had the fortune to help some amazing sales and marketing leaders. He starts by earning their trust. Much of this comes from his deep base of experience. With more than 25 years in sales, sales management, pre-sales and sales operations, he’s never met a challenge he didn’t like. And with backgrounds in sales leadership, marketing, and sales operations, he shuns the idea of being a desk jockey and relishes the idea of living in the field.


Mike maintains, develops, and leverages SBI’s library of emerging best practices for sales and marketing, which leads to evidence-based solutions, custom-fit to each client. Maniacally focused on execution, Mike does not believe in giving clients fancy deliverables with no operational details. He knows that field adoption is key. After all, if behavior doesn’t change, the lift doesn’t come. Likewise, if those closest to the field adopt the solution, the client wins.

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