Artwork by James Montgomery Flagg, 1920
Allinio is headquartered in the Washington, DC area, so we could not resist a blog post tying Marketing to the travails of our government. There are lessons to be learned from the Federalistas’ latest drama. Whether it involves a start-up or corporate division, a Marketing budget is under more scrutiny than ever. And while this may appear to be common sense, here’s what Marketers need to realize and think about a little harder than normal:
You ultimately do not have control of your marketing budget. Someone grants it to you. Every year. And that “someone” can change every few years. They may like what you’re doing one year, but for whatever reason, they leave and their replacement(s) decide they don’t like what you’re doing; therefore, they will reduce or eliminate it. So do not assume that you will get the same budget for next year as you did last year, just because you got that budget last year. As a marketer, your budget should be a function of sales; the factor varies from industry to industry and lifecycle of the business, but overall what matters is knowing that x dollars spent by marketing should result in y dollars of sales revenue.
Those that do have control of your marketing budget are often at loggerheads with others in the organization. Sometimes these conflicts are very open and obvious; other times and depending on corporate culture, they are not. Do not assume you know the hardball that’s being played in the layers of management above you. What you do need to know is that if you expect the person to whom you report to go to bat for you, you must supply them with whatever ammunition they require, and then some. It is harder for another department head vying for a bigger piece of the pie to shoot your ideas down at the budgetary phase when your boss is armed with logic and data to back that logic up. It is here we insert Allinio’s usual gospel of Marketing Automation. One of the most important things you can do to defend your department is to be aligned with Sales, and have the lead management processes in place, augmented by a Marketing Automation platform, that helps you show how your efforts and budget directly affect sales. That ammunition is hard to counter.
Those with budgetary authority have to decide who or what is “essential” or “non-essential.” Many times those things that are misunderstood or hard to show value on are deemed “non-essential.” Non-essential items will be eliminated first- especially the “warm fuzzy” things Marketing has traditionally done like sponsorships, advertising, and events like trade shows or conferences for professional development. And of course, human capital can be labeled as such. You must be prepared to lose a “non-essential” slot in your headcount yet still perform your usual tasks without them.
Even the rumor of a “shutdown,” furlough, or layoffs and hiring freezes create uncertainty and anxiety. And in the private sector, rumors of acquisitions or mergers potentially increase that uncertainty and anxiety. Confusion or growing lack of confidence in your organization’s ability to deliver products and services at a consistent level induce a negative impact on sales. Customers make behavioral changes regarding the consumption of your product (use less, don’t upgrade, find other sources/substitutes, etc.) You must be prepared to craft messaging and train various departments such as Sales or Customer Support how to communicate those messages to their stakeholders.
Finger-pointing does not help. It is not a good internal tactic, nor is it a good external tactic. When your organization is faced with significant cuts in budget, citing past failures on your or other departments’ part is not equal to a solution moving forward. Maybe a department has been spared a drastic cut for political and not business reasons, and rival departments are tempted to find fault in that for their own operational failures; however, that is an opportunity to hunker down and determine the definable, reasonable, and measurable objectives that you can achieve to show your worthiness of increased budget moving forward. And of course, blaming other departments or vendors in front of customers does them no good. Like the finger-pointing going on between the two major political parties which causes the voter to hold his nose in disgust, so too will your customers hold their noses and shortly “vote” for another vendor; such an exodus also may threaten your budget.