Let’s face it: budgeting and financial planning aren’t the sexiest parts of a marketer’s job. On the surface, budgets are boring; they’re not public-facing, they’re not seen as creative, and they’re often kept on headache-inducing and error-prone spreadsheets.
It’s time to think differently about the ‘dollars & cents’ side of marketing.
The humble budget can be one of your biggest tools in running a marketing organization, not just doing marketing activities. Allocadia’s empirical research into Marketing Performance Management revealed that best-performing marketing organizations focus on core operational data including — you guessed it — marketing investments.
Here are 3 excellent strategies for marketers to act like investors.
1. Have a Micro Focus and a Macro Perspective
Like investors looking to expand their portfolios, a combination of micro and macro focus is essential for marketers when mapping out your budget dollars.
Macro factors like the following can have outsized effects on the nitty-gritty details of a marketing budget or plan:
- Industry trends (How can I use insights from industry analysts or benchmark data in my strategic investment plan?)
- Competitive threats (What are existing competitors doing and which new ones are emerging? Where can I invest to stay ahead?)
- Trends in buying behavior (Which investments will resonate best this year with my customers, buyers and prospects?)
- Shifts in technology (What technologies do I need to invest in to bring my organization to the next level?)
It can be tempting to put together a wish list of programs and activities without stopping to consider what’s happening at the macro level, especially for Marketing Ops pros and Field Marketers. But marketing teams who keep the macro perspective in mind will be rewarded.
2. Stay on Course
Investment pros have a very clear recipe for which investments go into their fund or portfolio. If they’ve promised that 30% of a fund will consist of American blue-chip company stocks, their clients expect them to stick to that — no matter what. Marketing investors need to be conscious of their investment mixes, too.
Most enterprise organizations have a very clear set of company goals that the marketing team’s efforts must support. For example, growth in Latin America and current customer upsells may be identified as the two top priorities for the year ahead. Corporate-level priorities should be your guide when allocating marketing budget dollars.
In our study, 83% of high-growth companies “often or always” align marketing performance goals to their company’s objectives, compared to only 50% of companies with little to no growth.
- Learn from Past Performance
While every investor knows that past performance does not guarantee future returns, it certainly influences decisions about where to place their money. An investor’s reputation is tied closely to their portfolio’s performance.
On the marketing side, one of the most frequent questions a marketer faces is ‘where should I invest my next dollar?’ The best way to answer that question is by looking to the past.
Examine a report on last year’s marketing performance and “pivot” according to specific objectives, product lines, geographies, and regions. This will reveal all kinds of interesting insights about where to place your bets.
Did your digital advertising campaigns make a huge impact in Europe? Were a large number of deals influenced by a particular live conference? Did a big bet on industry analyst programs pay off in a major way? Let those past insights guide you as you plan the next period’s budget. It’s surprising how few marketers rely on anything more than gut feel when allocating funds. Only 55% of companies in our study reported the ability to run baseline reports on past Marketing performance, whereas 13% of companies reported lacking the ability to run any reports. (Yikes.)
There’s another reason marketing leaders should keep tabs on their teams’ past performance. Like investors, CMOs are rated on how much revenue they helped drive; the best ones are rewarded with bonuses, trust, and additional budget dollars. Those who can’t quantify their impact will have a harder time holding onto their positions in the C-suite.
Just like the pros who work at Wall Street firms, marketers are stewards of someone else’s resources.
Working in marketing can be creative, experimental and often fun. However, by applying the disciplined, analytical thinking common to the world’s greatest financial investors, marketers can become the best possible managers of every dollar entrusted to their care.
For a more in-depth look at how marketers can benefit from an investor mindset, you’ll want to check out the “What Marketers Can Learn From Wall Street” ebook.