Before coming to work at Element, I was a part of some fantastic organizations that were innovative in their planning and execution. However, every year the third quarter seemed to casually sneak up on the marketing teams I worked on, oftentimes causing us to make the same mistake so many organizations encounter: rushing to complete our marketing budget for the next year. We all know the first draft of any marketing budget is never approved, so you need to start early because the multi-step approval process could potentially take months. We also know that a marketing strategy should drive what activity is within a budget, not vice versa.
According to a 2018 Gartner CEO and Senior Business Executive Survey, marketing budgets are typically around 11% of a company’s total revenue. While having this benchmark in place to help guide your overall budget is important, it’s equally as essential to understand the activity that is driving the budget.
However, before you can determine activity, you need to understand the WHY. Some examples are:
- Why are you exhibiting at that yearly tradeshow?
- Why do you advertise in particular publications?
- Why are you promoting one product line or service over another?
There must be a strategy for every activity which will then determine where marketing dollars are spent.
Here are some guidelines to get you started in the right direction as you incorporate strategy into your marketing budget for 2020 and beyond.
It’s not about you, it’s about your customers
Look in the mirror and repeat after me: “It’s not all about me.” All joking aside, a common mistake made by many is to focus all efforts on what your company’s products and services are versus what your customers’ pain points are. Successful companies spend considerable time understanding what is going on in their customers’ worlds. They partner with their customers and find out answers to questions like:
- How are they planning to grow?
- What issues do they need resolved?
- What are their strategic goals?
- Who is their competition?
- What differentiates them in the marketplace?
Knowing your customer, what their needs are and how they get their information is an essential element to your marketing strategy. To read more on this topic, check out a recent blog, The Customer Mindset: How to Uncover What Matters in Marketing.
Your proverbial sandbox should be big enough for both sales AND marketing
This is the age-old tale: sales thinks they rule the roost and are the center of your organization. So does the marketing department. If you don’t have a marketing strategy, you can’t sell. But, if you don’t have sales, you don’t have customers driving the activity and keeping your business afloat.
So, who is correct in this argument? The answer is: both. Sales needs marketing and marketing needs sales. Successful organizations recognize this and encourage these departments to communicate with each other. The best salespeople leverage their marketing teams and the best marketing teams sit down with their salespeople to understand more about target audiences. Salespeople are the feet on the street who know your customers best, after all.
Marketers should be asking questions like:
- What are our customers’ growth goals for the year?
- What are their pain points?
- What products and services are we selling to them?
- What can we sell them that we aren’t currently?
- How are we planning to sustain or grow this account?
- Where are our customers getting their information?
Finally, here’s a big one … get ready, marketers:
What marketing activities do you think were the most and least successful over the course of the last year and why?
The best marketing plans synthesize and act on this information gathered from sales.
You must look back to move forward
As you are executing your marketing activities throughout the year, you should be tracking activity, timing, touchpoints, engagement, and hopefully more. Although you may have multiple people on a team executing on different product lines or managing different activities, they all should be tracking their data points. Before you even sit down with your team to put together a budget for the next year, make sure that they use the information gathered throughout the year to help to develop their portion of the current situation.
Assemble your team to review this landscape, making sure everyone sees the activity and knows what went well and what didn’t. Perhaps you had more booth visitors at one show, but not the other that you exhibited at. Maybe one product line was slow-moving in the beginning of the year but then picked up in Q2. It could also be that one blog topic received more clicks than any of the others. Make it your team’s goal to call out this activity and to understand why. Everyone should have an underlying understanding of all activities, whether they manage it or not because tactics should integrate to tell a larger story.
It’s good to have organizational goals
Before finalizing your strategy documents with your team, it’s also important to know where your company is headed in the next year. Make sure your leadership team is paving the way and sharing the vision of what the company’s strategic goals are. Knowing this information allows you to align each of your marketing strategies to an overall company goal. Your growth strategy must match your company’s product or service capabilities.
Bringing it home in proper order
After you and your team have evaluated past wins, comprehended what your customers need and how your company goals integrate with what your customers need, it’s time to start putting together the strategy.
- Determine your goals and objectives for the year. Keep in mind that simply stating “growth” will not be good enough. Be specific.
- Next, list out your current target audience(s). Consider that there will be secondary audiences that will influence your primary targets.
- What is the action you want your audience to take? This should be the foundation of the messaging you want to convey to each audience.
- Once you know the audience you need to reach, what goal you are trying to achieve with that audience, and what you’ll say to convince them, then you determine how. I have found that determining the tactics or activities within a strategy is usually the fun part, so by second nature, we as marketers, tend to focus on that bucket. You’ll find quickly that if you are communicating incorrectly to an audience, the how really won’t matter. Tactics need to be determined last to ensure a successful strategy.
- Finally, after all of this is completed, it is now when you take your marketing dollars and assign tactics to each section of your budget with the insights and intelligence you have gathered.
The bottom line?
Do not simply look at the marketing activities that were done last year and automatically account for them again in next year’s budget. Use information from your sales team, take trends and your customers’ goals into consideration, and keep your tracker updated throughout the year so it can be a source of truth in terms of proper placement of your marketing dollars. You should be responsive to the current and everchanging landscape of your customers and adjust accordingly.
It’s never too late to incorporate these processes. If your 2020 budget has already been submitted, start taking the steps we recommend to better plan for 2021. And of course, Element is always ready to partner with you to develop an effective strategy to use for your marketing budget. We have many years of experience analyzing marketing strategies for a variety of clients. Call us today at 920-983-9700, email us or visit our website.