It seems as though the days of COVID-induced turbulence are numbered. And yet, marketers are still dealing with decreased budgets and how to make the most of their marketing spend. The right tools can drive impact despite budget cuts.
Now is the time for precision and focused initiatives. A smaller budget is the excuse you need to trim the fat of your operations and ensure every single dollar is contributing to ROI. We’ve pulled together 5 ways to optimize your marketing budget:
- Align Marketing Spend to Business Goals
- Use Data to Drive Decision Making
- Build Integrated Marketing Plans
- Control your Budget
- Align with Finance
Align Marketing Spend to Business Goals
Marketing metrics shouldn’t be kept secret. All marketing dollars should be tracked directly to a company goal to support collaboration and impact. Without alignment, marketing runs the risk of missing strategic goals. Marketers must be able to share and track their marketing goals with the rest of the company to ensure that they are on the path to hit KPI’s whether that be revenue goals, brand awareness, or demand creation.
And changing budgets doesn’t mean less focus should be placed on ROI. Aligning marketing spend to overarching business goals increases marketer’s confidence and allows the impact of marketing dollars to be fully realized.
Marketers should start by considering the company’s top priorities, revenue goals for the quarter/year, and what goals are being set for the product such as implementation rates.
These connections will be the backbone for justifying marketing spend moving forward. While the decisions of company goals may be a discussion reserved for executive leadership, remember that every marketer has to understand the reasoning behind their initiatives. Aligning marketing spend to business goals requires buy-in from every level.
Here’s a step by step guide to aligning marketing spend to business goals:
Use Data to Drive Decision Making
Marketing decisions can’t be a shot in the dark. Like any important decision, they must be driven by data.
How are you going to measure your performance and determine the best course of action? Data is the key to confidence for any marketing team in making decisions that affect ROI.
Lucky for you we know the marketing measurements needed to make that the level of data-driven decision making.
The data hierarchy describes the use of many types of data from core investment numbers all the way to impact metrics (think spend and ROI respectively) that marketers should connect data to specific actions and company goals. Marketing spend that’s aligned with data shows that marketing is making smart, strategic investment decisions. This can span from using ROI data to justify a budget increase or spend metrics to determine cost reduction areas.
The data acts as a support to prove that marketing spend is aligned to company goals and help determine the right investment decisions.
But how do you source this data? Every marketing team must have its own data strategy to determine what’s useful and when to apply it. A data strategy empowers a team by treating data as an asset and serves as a standard across projects and divisions.
For the sake of brevity we can boil it down to these steps:
As is true with all data, you must constantly improve the quality, cleanliness, and iterate to facilitate the best decisions – which coincidentally happen to be the optimal ones. Better data leads to more visibility which means less wasted marketing spend.
Build Integrated Marketing Plans
Your marketing plan should have the capability and scope to do everything it needs to do, and nothing it doesn’t. This is the essence of an integrated marketing plan: interconnectivity that supports proper evaluation and communication. Investment allocation should be based on your data-driven conclusions with weights determined by urgency and potential return. Integrating your data-driven goals and actions into your budget allocation ensures that dollars are not being wasted or misplaced.
Using relevant metrics will allow you to build out a base of activities that drive you towards your strategic goals. These activities must be evaluated for ROI outlook and ranked accordingly. Don’t waste your budget on projects that aren’t showing promising returns.
Integrated plans go beyond decision-making and budget allocation. The next step is to ensure that your calendar is organized with strategy in mind. Your marketing spend should be attached to specific goals on your calendar that relate back to overall strategic goals. An optimal budget is integrated into every aspect of the planning process, providing a direct path from marketing spend to ROI.
This is easier said than done, so how do we determine where to put our money and how to utilize our integrated plan? Forrester has provided a 6-step guide to their approach here, to provide some real-life insight into the process. Their integration ensures that marketers from all functions are a part of the planning process in order to have clear insight into their budget.
Control your Budget
You can’t know the effect of your marketing dollars if you can’t tell someone exactly where they are; an optimized budget requires extreme transparency. Every activity should be connected to your budget at a minimum, and keeping your budget up to date is essential. We recommend updating forecasts daily. Up-to-date forecasts make sure that communication with fiance is constant and easy.
Taking control of your budget also means acknowledging the monetary commitments you’ve made to carry out activities and strategies. It’s not enough to simply put the budget aside for a webinar program, the money must be tracked throughout the planning and execution processes.
As for top-down vs bottom-up budgets, we don’t strictly recommend either. The budget process should be a collaboration between marketing leadership and team leaders to determine the proper allocations needed to meet company objectives. Company targets are a top-down decision while activity plans are bottom-up, allowing marketing teams to lay the groundwork for their budget requirements. In order for this combination to occur, all marketers need to be a part of the budget discussion from being aware of company objectives, to determining their own activity plans.
Controlling your budget requires constant analysis of your priorities. Reallocations and shifting budgets should happen if new (and better) business opportunities arise. As such, you should regularly review your budget against your strategic goals to see if it could be more impactful with different investments.
Remember, controlling your budget is about information and communication. It’s a constant process of important decisions and being fully aware of how your marketing spend is being used to ensure that ROI is within reach.
Align with Finance
Sometimes we view finance as a gatekeeper of much-needed marketing dollars instead of a vital partner. By viewing finance as an additional marketing team member, we can get the budgets we want and align on key goals for long-term support and understanding.
When it comes down to brass tacks, finance and marketing are united under the front of revenue and big-picture company goals. The issue is communication, to be partners with finance they need to have a clear understanding of how marketing spend is driving revenue growth. Enter ROI.
Utilizing ROI will develop an easy line of communication between finance and marketing showing a direct path from marketing budget to revenue. This is done through a holistic view of investments as revenue engines and syncing with financial data to know what’s forecasted and spent in real-time. This consensus ensures agreement on how much KPI’s are driven by marketing and the efficient use of budgets.
Aligning on budget targets and KPI’s will result in higher performance and easier communication, creating a holistic approach to the marketing investment decision with finance and marketing working side-by-side. Growth is possible despite decreased budgets with the right mindset and communication.
Collaboration between finance and marketing is especially important during the final days of the pandemic as decreased budgets have forced goals to be S.M.A.R.Ter than ever as they must do more with less. A decreased budget should not stop growth or marketing plans, it is up to marketing and finance to adapt and overcome.
It’s been an interesting year, with shifting budgets, new priorities, and long-lasting effects. With an optimized budget, the outlook will change from navigating roadblocks to utilizing opportunities.
With Allocadia you can tell exactly where your marketing dollars are being used, down to the cent. Decreased budget or not, knowing exactly where your money is going is vital for optimization.