8 tips for making your marketing budget do more in 2023
We recently hosted a webinar with Dustin Zaloom, Vice President from Insight Partners, Matt Heinz from Heinz Marketing Inc, and Carol Howley from Exclaimer. They gave us their tips on creating a marketing budget in 2023 and how to get your CFO on board.
You can catch the full episode on demand here.
For now though, here are our key takeaways:
1: The ‘bottom-up’ budget planning approach
When creating a marketing budget, bottom-up budgeting is a technique based on the revenue potential of specific activities. It means allocating your marketing budget to activities based on the highest revenue impact, not just an even spread across channels.
The concept is simple: identify high-performing campaigns, products, or services and allocate more resources to them while cutting back on less successful ones. Dustin says:
“It's one thing to get your pipeline goal or your bookings goal from your top-down planning. But bottom up should tell you whether you can actually achieve those goals based off the channels you have available to you. And the landscape of marketing channels shifts every day, but making sure we have our historical data in a good place so that we can use that for our planning.”
Top tips for bottom-up budgeting include:
Matt expands on this, highlighting the importance of telling the story behind your marketing budget:
“I think we as marketers don't always do a very good job of telling the story behind the budget. We're telling a story about what we're trying to do with not just our marketing budget, but with our marketing programs overall. You are not spending money on tactics. You are buying outcomes for the business…that's how we as marketers communicate our role as revenue producers, not cost centers.”
2: Ask for organizational goals upfront
When creating a marketing budget, don’t underestimate the importance of having a business-oriented conversation with your finance partners and board members. Matt goes into some detail on this, saying:
“What are we trying to achieve, and what is our corporate strategy to get there? Are we focused on net new customers to hit our numbers? Are we leaning in on existing customers and expanding our book of business? A lot of companies are doing that right now when they know that getting new logos is going to be more difficult.
Sustaining existing relationships is where they're going to sort of drive at least short-term success, maybe in the next year or so. If that is the goal for the organization, how does your strategy and your budget align with that?”
3: Get sales buy-in
Your marketing strategy should reflect what you need to do so that sales can do their job more effectively and vice versa.
Salespeople often ask what they need from marketers; now it's time for marketers to ask sales questions about themselves! Ask about specific goals like new lead generation. Discuss specific target audiences to go after and confirm key pain points like losing deals. Then, build strategies around these insights into areas where both teams can work best together and get everyone excited. Matt adds:
“Your sales counterpart should know what your strategy is, should buy into what you are doing, and be nodding enthusiastically as you walk through what you need to be able to support his or her goals, right? And I know this takes a little more time, but I guarantee you your sales partner will appreciate you coming in and doing this.”
4: Cut unsuccessful programs from last year
One of the most important steps in creating a marketing budget is identifying and cutting unsuccessful activity. These are marketing activities that didn't produce results, but still cost you money. Matt says:
“Another key to a successful budget: give money back. Be very clear about what hasn't worked. I think a lot of marketers are afraid to do this because they're afraid to lose budget…Be clear about what you're cutting that communicates to the rest of the organization that you are accountable, that you are looking at metrics, that you are thinking about the money with kind of more of an owner mentality with more of an investor mentality. That's what the CFO is going to love. ”
To do this, you'll want to look at your analytics data to see if there are any trends to what worked and what didn't. For example: Did some products sell more than others? Did certain types of content resonate with customers better? Looking at these kinds of metrics will help determine which aspects of your marketing strategy were successful so you can keep adjusting accordingly throughout the year.
This kind of mentality is another way to tell the story of your marketing budget, and it also builds credibility with your CFO by showing them how much these cuts will save and the new opportunities available. You'll then become more trusted when making decisions like this in the future.
5: Report based on funnel stage rather than marketing channel
Naturally, your CFO will want to know how you're spending your marketing budget. In the past, marketers would deliver reports based on marketing channel performance. However, in 2023, we suggest that you break down your budget report based on phases of the buyer's journey.
Matt goes on to clarify:
“This is one of my favorite things that I think aligning with this idea of communicating what you are doing in marketing based on the outcomes, not just based on where you're spending money, what is the story you're telling the organization about what marketing is doing and where you're deploying resources? And sometimes we can do that best, not just by saying, well, here's all the digital channels. And here's the PR and here's the social. But like, what is the job to be done? What are the different phases of business goals we're trying to achieve?”
“Could you break down where you're spending money based on phases of the buying journey, starting with market development? How are we increasing market share? Understanding of the problem, understanding of our role in solving the problem? What are we doing specifically to create demand and to capture demand, and to manufacture demand in that market? How are we supporting the sales team in converting higher volume of opportunities? And then what are we doing to increase lifetime value?”
6: Project results (with a focus on revenue, not spend)
Creating a marketing budget should not be taken lightly. It's important to understand your organization's business goals and how marketing can help you meet them.
Once you've determined what you want to achieve, it's time to think about the budget required to reach these objectives. This is where many businesses go wrong. They have unrealistic expectations about how much money they need based on current performance or projected growth. They're then disappointed with the results.
On the idea of budget cutting, Matt says:
“You can figure out what you're going to cut, but you can also show quantifiably how that will depress results you can generate. Like if you come in and say, oh, yeah, you know what, we're going to hit, we're an impact 10 million the pipeline this year, and you cut my budget by 30%, but we're still going to hit $10 million in pipeline. If I'm a CFO, I'm like, how much more could I cut and have you still commit to this number, which is a really dangerous game because you still commit to that number, and there's a higher risk of actually hitting it. You may hit, you may have the tighter budget, you may have lighter expenses.”
7: Tie bonuses to revenue impact
Revenue impact is the most important metric for your marketing budget, so plan any bonuses with this in mind. This means that when creating a marketing budget, incentivizing your marketing team to drive higher-quality leads should be prioritized. It'll go a long way to making your marketing budget work harder. Matt says:
“So, how do we make sure that our efforts and our budget are tied to things that are working and give your organization and give your people from top to bottom incentives to make adjustments along the way? You build a budget and a plan right now that is not your plan for the rest of the year. That is your intended plan for the rest of the year that it's your responsibility to review, to adjust, and to make sure it's as focused and tightly aligned with driving performance as possible.
And the better you can tie bonuses and other incentives to the impact of those adjustments. So that ability to be agile and focus on what's driving performance, the better off you're going to be.”
8. Ensuring future expenditure is contingent on success
As we've highlighted throughout the article, you should also be prepared to cut marketing budgets if something isn't working.
But how do you know when it's time to do so?
The best way is by continually reviewing your plan throughout the year and remaining agile. If certain initiatives aren't producing results, they should be removed from your marketing plan. However, if any of your campaigns are performing well, they may need additional resources to scale them up. This process will go a long way toward creating a marketing budget that's even more successful.
And it's important that you bring your CFO along on this journey. Matt explains how to do this:
“So if I come in right now and I say, listen, here's the job I need done, here's the strategy I believe is going to work. And I'm going to tell you that halfway through the year, if some of this stuff isn't working, we are going to stop doing those things and either redeploy that to something that's working or find some plan B of making it work.
But I'm also going to tell you, Mr CFO, that if I find something's working. And I think there's scale in impact on that, I'm going to come ask for more money. And I'm going to make a case for how it's working and the impact that I could have…Tell that story upfront. I don't know a whole lot of CFOs that are just immediately going to say no to that if something's working, that can drive business results. As a CFO, my job is to spend more money in that place.”
The biggest takeaway from these approaches to creating a marketing budget? Take a holistic view of your marketing program. Don't just look at your budget and say you need to spend X in order to reach your goal. Instead, tell the story of how you plan to use your budget and bring your CFO along with you. Always look at the most efficient ways of building a bottom-up model for your marketing budget. Finally, constantly analyze your tactics, remain agile, and focus on driving business performance.
And don't forget to look at other channels to better deploy your marketing budget. For example, your email signatures are a high-volume, low-cost avenue for delivering targeted content to your target audiences.
Now here's the great news: Exclaimer's email signature software can actually help support an agile marketing budget. How?
Learn more about using Exclaimer throughout your organization to centrally manage email signatures and turn them into a new marketing channel. Or get yourself a free demo and see how easy it is to use email signatures for cost-effective marketing communications.