Written by Julia Stead, CMO at Allocadia
Some CMOs are asking about how to respond when a CEO tells a CMO to only focus on short-term spending. Should a CMO make the case for a longer-term financial commitment, or is now not the time?
If your revenue, or potential revenue, is affected by the economic crisis then most (but not all!) investments should support short term mitigation. But it’s critical that marketing teams maintain a spend strategy that supports both current goals and future goals.
My top three recommendations for spend strategy right now are:
- Support the retention and growth of immediate revenue streams
- Adopt an agile budgeting and planning strategy
- Long-term investments should focus on brand or innovation
1. Support the retention and growth of immediate revenue streams
Closing leads, renewals, customer retention and any other activities that secure immediate revenue are the top priority for marketing in this quarter and next. Another way I’ve heard it phrased is “love the leads you have”. To do that, you’ve got to get clarity on budget, and understand which campaigns and spend drive results in these areas. You also need to see week-to-week what’s been committed. Plans are changing so quickly, you need to know how much is available to pivot from Plan A to Plan B (or Plan C, D, E…). We’ve all had to adopt a more agile budgeting and planning strategy thanks to the constant market fluctuations.
For example, we were talking about launching a new program (let’s call it Plan A) in three weeks time. By the second week we realized Plan B is a better use of our resources. We hit pause on Plan A to pivot to Plan B. I need to know right away how much we’ve spent on Plan A and how much can be allocated to Plan B.
This ability to pivot quickly would not be possible without a system to collaborate in. Having the answers at my fingertips, rather than needing to ask my team to organize a horde of spreadsheets is priceless. We would be wasting so much time on manual operational tasks, instead of using that time to plan strategically.
2. Adopt an agile budgeting and planning strategy
Agile marketing is a skill set we’ve all talked about for ages, but it’s rare that organizations fully adopt the practices. As a result of the pandemic, we’ve been forced along the adoption curve and I believe it’s application and benefits will stick long after the pandemic is over. At Allocadia we’ve kept a loose quarterly strategy, but have been planning and executing within 2-3 week cycles. And what I’ve learned from this is that short-term planning and executing is more effective and way more interesting.
We are witnessing the beginning of a marketing revolution. It was always necessary for marketing to be flexible, and we’ve been agile to a degree. But marketing during COVID-19 is a whole different story. People tend to fall back into old habits, but I hope we continue agile marketing in a post-COVID world. It’s demanded us to focus on real-time feedback loops, pay closer attention to our buyer and market behavior, and opened the doors for more creative experimentation of tactics. It’s also opened our eyes to flaws that existed in the planning process.
Before, strategic planning was ok in a tool like PowerPoint; and it’s still a great way to communicate your final plan. But now that planning is part of my weekly routine, I’m rethinking my methods. It’s just not efficient or flexible enough to keep up with the shifting priorities. Systems that allow marketers to efficiently plan strategically and flexibly will be more in demand.
3. Long-term investments should focus on brand or innovation
There’s no good predictor for when the markets and economy will be reliable enough for confident future planning, and doing any kind of long term pipeline or revenue forecasting is just futile. But I don’t think that means we forget about future investments altogether. Instead, there are three qualifications for long-term financial commitments:
- Keep long term fixed costs as low as possible, but don’t skimp on critical pieces of technology or people resources
- It’s critical to maintain a decent level of brand spending to ensure consistent awareness
- They should align to your company’s strategic goals and investments
Any long-term financial commitment your marketing team makes should meet at least two of these qualifications. The first qualification doesn’t require much explanation: we all understand the unpredictability of the markets right now. As for the second qualification, if you’re aiming to grow your organization post-COVID (and you should), then you can’t afford to cut back too much on branding. You need to maintain your awareness in the market and solidify your foundation for future growth. Plus, as others chose to go quiet, you have even more opportunity to be a thought leader in your space.
Long-term investments that fall outside the bucket of branding, PR, and AR, should all have one thing in common: they must align to your company’s strategic goals and investments. And when it comes to the long-term, these investments typically fall under innovation such as supporting product development and research. Marketing drives impact when they align tactics to corporate objectives. We’ve always advocated for this level of strategic planning, and now it’s imperative for success. Marketing, or any other department, can’t afford to invest in activities that don’t support the overall company strategy.
Whatever else the past couple months have been, it’s been a period of learning quickly and adapting to change. If I’m certain of anything, it’s that there are more changes to come and the best way to meet them is by leaning into the curve.