article | September 26, 2017
Is Your Marketing Budget a Paper Tiger?
The marketing budget is in a spreadsheet, but not in the heart of your CEO. The result? When it is time to cut expenses, you are at the top of the list. The CEO doesn’t see a clear tie between marketing spend and top-line revenue. The goal of this post is to show how to tie your marketing plan to the corporate strategy. Doing this will win over the CEO, saving your marketing budget.
Know exactly how to start with the Corporate Strategy as an input, and the methods to develop your marketing budget. Leverage the How to Make Your Number in 2018 to access a proven budget planning method in the form of workbook questions. Turn to the Marketing Strategy section and flip to the Budget Strategy and Planning phase on page 274.
The Paper Tiger
Right now your marketing plan is a paper tiger. It’s impressive to a marketer, but likely draws a yawn from the CEO. Few CEOs came up through the ranks of marketing or sales and they rarely understand marketing. They spend because they know they should, but at the first sign of trouble the spend is in jeopardy. Save your marketing budget by linking it to the corporate and product strategy.
Why this is a problem? Under-fund marketing and you will constrain revenue growth. Over-fund marketing and your profits will suffer. Peanut butter spread a marketing budget across all segments, accounts and buyers and you will run out of money quickly without showing results. Revenue growth requires embracing objective-based budgeting and the precise allocation of your marketing dollars.
Tie to Corporate Strategy AND Product Strategy
World class CMOs are engaged in conversations at the C-Level suite about corporate strategy. The corporate strategy in many companies is top-line revenue growth plus tactical details. That’s just not enough. As a CMO you need better inputs.
CMOs can fall into the trap of developing a marketing plan without good input. Spend time with C-Suite peers to understand the corporate strategy. When your executive team includes a Chief Strategy Officer, then follow the advice in this recent post that correctly identifies the strategy officer as a secret weapon. If a documented corporate strategy doesn’t exist, challenge the CEO to provide you with clarity. Top CMOs demand more and don’t run off on a goose chase.
The corporate strategy defines the markets and businesses the company chooses to operate. This includes a business strategy outlining how to compete. This is all done in the context of the company’s mission and vision (What the organization does, why it exists, and what it intends to become). The corporate strategy becomes an input for the product and marketing strategy
Product Strategy tackles the market problems to be solved and competitive differentiators. In addition, market research is performed and the product portfolio is defined. This results in a Product Roadmap. From there the messaging, go-to-market plan, packaging and pricing are planned. Imagine the advantage to having all this information from Product Management to guide your marketing plan?
Building the marketing strategy is all about executing both the corporate and product strategy, and supporting the sales strategy. This approach turns the tables on the past approach of marketing requesting dollars FOR marketing. Instead the conversation becomes centered on the business and product needs, all with the intention of supporting top-line revenue. It’s no longer about marketing wanting money for the sake of marketing.
Marketing strategy is how the corporate and product strategy come to life. CEOs that understand the evolved buyer are already there. Taking this approach will help you educate the C-Suite on the dire need for marketing.
With the product strategy as an input, you can get laser focused on product launch. You throw out the old scripts for product launch. You begin building a plan with real meat to drive new product adoption. With the additional product insight the marketing takes shape with teeth. The CEO is impressed when he or she reviews the new marketing plan.
Marketing Strategy as an Output to Sales Strategy
Just as you require the right inputs, so does Sales. Your peer in Sales is developing the sales strategy and needs your marketing strategy. To start with, the marketing strategy provides market, buyer and account segmentation. From there brand, positioning, campaign, content and sales enablement planning provide guidance to the Sales Leader. Your marketing strategy serves as a linkage from the corporate strategy on through to the sales strategy.
As a B2B CMO you are constantly validating your budget. Help the C-Suite understand the tie between corporate strategy and elements of the marketing budget. If you would like to spend some time with me on this subject, come see me in Dallas at , SBI’s executive briefing center.