Art & Science Blend with Educated Guesswork in a Marketing Budget
RevOps marketers oscillate between excitement and panic when it comes to doing the annual budget. Whether the process is marketing first (with an outrageous request for ridiculous sums of money) or executive first (with paltry sums that make you want to cry in the bathroom), there is usually a process of negotiation to arrive somewhere in the middle.
As Camela Thompson, Director of Growth with CaliberMind, explains, budgets are based on meeting a revenue goal.
“Unfortunately, it’s typically handed to them,” she says of that corporate revenue goal given to the marketing team. “The executive leadership team looks at historical performance and historical growth, then throws an ambitious goal out there that’s usually above and beyond what we’ve done historically.”
Everyone can dream, right? No, seriously, that’s the goal.
Bear with us, we know full well that even the digit-heads of the marketing team tend to glaze over when the budget spreadsheets come out. This isn’t talk about the latest social media app or a new analytics tool. It’s cold hard numbers. And it’s a view of what’s being committed to in the future.
Setting the Smaller Goals
Marketing needs to take that overall goal and back up the intent to achieve it with real activities and numbers. This is where art and science blend. It’s looking at historical activities, successes and making some educated assumptions to come up with a new budget.
“I work it out in a spreadsheet and on one tab, I have salaries for everybody, on another tab I have all of my applications in software, on another tab I have campaign expenses by campaign and then on another tab I have advertising expenses,” she says. “All of them are going to be summed up to go to my total budget.”
Coming to those educated assumptions takes teamwork and generally, Camela will work with one or more of the marketing team to consider what activities worked in the past, what things will move the necessary dials in the future and what are the unknowns. She’ll share or “socialize” the budget (everything but salaries) with them.
This way, others help contribute to the understanding of what kinds of conversion rates by channel are logical and what’s needed at different points.
Being an Advocate for the Organization’s Intents
Obviously, in the case of new products or services, everyone from the marketing coordinator up to the executives need to keep in mind that B2B products can have a long sales cycle. Yes, some executives may think you’re spending too much time navel gazing and not enough time doing, well, whatever it is they think you do.
The truth is, it takes time. Especially for a new product.
“I have to do all these awareness and branding exercises,” Camela says. “Those aren’t going to immediately turn into revenue. There’s going to be big lag times. So, I know I’m going to be burning cash and not seeing a big return.”
Is this a hard sell? You bet. Not everyone appreciates the time it takes to form marketing leads, get those leads into the pipeline, create sales relationships, make the sale and see cash come in. This may be one of the best things marketing teams can become proficient at explaining to the executive ranks.
Sure, you’ll all sound like you’re drinking the same Kool-Aid, but if the message gets through, it makes everyone’s life easier.
Each Need Gets a Bit of the Spotlight
Everything that needs to be sold, maintained or introduced as a product or service needs consideration by marketing. A new product launch may need a lot of the marketing budget, but a stable, legacy product can help bring in more revenue with a budget boost in the right area.
“Looking at expenses by campaign, making sure that I’m aware of my ad budget using analytics to see how efficient that budget is and where to reallocate is all going to be really critical,”
Camela says. “Look at the lifespan of the opportunity and assign even credit to all the activities that took place across the lifecycle of that opportunity.”
This delivers an understanding of which portion of the pipeline and of revenue are allocated to each marketing activity.
“I also have to keep in mind that what I’m spending today does not impact revenue today in a B2B business,” she says.
It might take three months to see a lead get into the pipeline and then another six months to turn that lead into revenue.
It’s not like Selling Socks
Low-price consumer retail items have such a short sales cycle, it’s easy to be envious.
“When we roll out a new product, we’re probably not going to sell any for the first four to seven months,” she says. “I’m going to need time to educate our audience, make sure people know about it, educate our existing customers and so on, before there’s any interest in the market.”
Assigning People to Hit the Targets
Even with the best automation, the best analytics, people are still needed to fulfill marketing functions. When tactics are identified, it’s essential to consider the people required to achieve those activities.
“So, if we need to triple our social media activity, and right now we’re outsourcing it to a company and spending very little, it might make sense to hire someone who specializes in it to manage not only the daily posts that we have to do, but also the advertising we pay for on those platforms,” Camela says. “I think the systems need to be in place capturing data to make sure it’s capturing what’s working and what isn’t necessary because executives are going to hold you accountable.”
A marketer’s life is analytics. It may not be why you went into marketing, but it’s going to be what helps you prove you know your stuff. Tracking isn’t always easy, but any measures are valuable. Sometimes simply seeing that the pipeline and revenue are going up consistently, as expected, has to be proof enough.
Tracking the Leads
This is where integrated solutions come in. When sales is able to follow through on leads and automated forms feed into that same CRM system, there’s a complex view of where leads come from, how they behave and what actions to take to sell the next product.
“You need some way to be able to look at all of the touches and not just the one that happened before the opportunity opened or the first one,” she says. “To just really understand where I should be spending money and what’s working.”