By managing director at Custard Communications, Jeremy Simpson
The dark art of budgeting for success in marketing does not need to be based on a repeat of what has always been done (and always will be), nor irrational personal preferences. Having once worked with a major blue-chip company whose CEO demanded that a significant part of the budget be spent on outdoor media along the route that he drove to work each morning, vanity media spend is not as rare as you might think.
To combat these pressures, and to enable you to persuade your stakeholders to loosen those purse-strings, I have found that there are five key steps for success.
- Challenge the preconceptions:
Many marketing plans and budgets are built upon years of suppositions and industry folklore. It is no surprise therefore that new brands entering the marketplace make swift inroads by taking a new approach. How? They have scrutinised the market. Investing time to research the audience, understand their needs, identify barriers to entry and determine whether their proposition truly fits to enable them to open up new avenues to growth. Internally you have access to a wealth of data, from key search terms to purchase and enquiry data to enable a picture to be built that may, or may not, alter your entire approach.
Costs for this are not prohibitive – internal data analysis is free if you ask the right questions. If your budgets are truly restricted when it comes to external research, you can even carry out the activity yourself. 10 or 20 calls to customers and prospects will give you a feel for their needs, and any uplift in performance will allow you to request more budget for a more detailed investigation in the future.
- Provide the evidence:
Now more than ever, the onus is on the marketing team to prove the value of their spend. A tracking funnel needs to be established to enable measurement from activity reach to spend, enabling measurement of conversion at each stage in between. This will allow the identification of the largest return on your investment, the lowest cost per acquisition and enhance the efficiency of the process from start to finish by optimising spend while delivering a higher quality lead to the sales function.
Data gathered from this will not only drive up your effectiveness and efficiency but provides you with the narrative to argue your case with the finance and leadership functions, in their lingua-franca of metrics. Being able to prove empirically that you have built your plan from the most cost-effective channel up creates both clarity and trust.
- Put your neck on the line:
To be frank, you have no right to request spend unless you are willing to commit to what this budget will deliver to the bottom line. However, in reality only around 50-60% of campaigns ultimately achieve what they set out to. Consumers change, competitors steal your thunder, the weather turns. No matter the reason the challenge often remains only partly met.
Establishing up-front an expected return for each Pound spent for each channel sets a yardstick to measure against. It allows you to determine whether you have succeeded, or not, and if not, why. Senior management will more likely forgive a troubled campaign if you can evidence learnings and identify the issues for future correction. Likewise, indicators of success can be repeated and refined.
Don’t think of this as a noose to hang yourself with, rather another method to open up the dialogue between marketing and senior management and to demonstrate your responsible use of company funds.
- Not all spend drives results:
The more efficient the funnel, the greater the return. Ongoing analysis of the data provided by the activities above will highlight bottlenecks in the response flow. Allocating budget to make simple adjustments throughout the process will greatly enhance the effectiveness of your media spend. A doubling of your website visit to form completion conversion rate will half your cost per enquiry. In one stroke your have overcome your budget reduction and given yourself breathing space for the rest of the year.
Small tweaks and adjustments throughout the customer journey will uplift the end result, most of which will be at low or minimal cost. Ongoing test and learn programs, with small adjustments will both deliver your uplift and at the same time likely save the need for larger, more radical, more costly overhauls further down the line.
- Budget for testing:
Over time, familiarity breeds contempt. As in life, so in marketing, constantly repeating the same tried and tested activity will wear thin and responses will dwindle.
Putting 10% of your budget aside to try new initiatives will let you push the boundaries, challenge the norms and identify new channels to expand for the future. None of your competitors will be standing still, so use this budget to have a little fun and try something new. You never know what might come back!
I cannot promise that all these steps will guarantee success. However, you will face your marketing challenges with greater knowledge while at the same time building an open and honest dialogue with key stakeholders which ultimately will build trust.
Success will come from how you implement the 5 steps above, how well you analyse the data and how you leverage these interpretations in future campaigns. What you will have however is a more solid foundation to build from, and the tools to make better decisions as you strive for success.
For more information about Custard Communications, visit https://custardcommunications.com/