Imagine. You've spent weeks “negotiating” the marketing budget and you have finally got one approved, albeit a bit less that you would like. Now at last you can devote your time to getting on with some real marketing.
Sound familiar so far? What happens next will also be familiar in many organizations.
Business is not going as planned--cuts have to be made. Down from on high comes the message “cut the marketing budget and grow short term revenues and profits.” A chorus of “oh no, not again” plus various expletives, emanate from the marketing department.
“How are we expected to do quality marketing when our budget gets cut?” becomes the phrase on everyone's lips.
The next question in marketing is, “Where do we cut?” Most often there is no guidance from senior management, so the common first reaction is to try to do the same things but just reduce the costs.
Once any obvious savings have been made, a common target is market analysis and the measurement of marketing programs. After all, devoting most of the money to the actual demand generation programs is the best way to increase short-term revenues--isn't it?
Oh dear. Unfortunately business is still not going as planned and further cuts have to be made. Guess where. Once more marketing is top of the cutting list.
A demoralized marketing team let out even more expletives and wrestle with where to cut. By this stage a big percentage of budget money has already been committed and often the only option is just not to spend any more money at all.
Suddenly, once well-rounded marketing programs begin to suffer from anorexia. Some still manage to weakly deliver, others don't.
Then, once again, it's spring, the birds are in the air and a new optimism strikes the marketing department. Budget negotiations start soon and they are confident that they'll be able to get the funding that they need for the next financial year…
What a terrible picture of marketing. But how many marketing people can honestly say that they have never had painful experiences like these?
In my experience, not many. The two questions are (a) Why? and (b) How can the budget pains be avoided, or, at least, reduced?
Why?
In a recent survey by the University of Warwick, CEOs in the UK were asked this open question: “If business was under pressure which budget would you cut first?”
Having read this far I'm sure that you already know what came up on top. In the number one spot was Marketing and Advertising, with 23%, followed by Human Resources at 18%, and Training at 13%. R&D and IT came in at 9% and 8%, respectively.
What is it about R&D and IT that make them almost four times less likely to be cut first than marketing? The answer starts to appear when the same CEOs are asked the next question: “Which are the necessary investments for long term growth?” Training and IT come in at more than 90%, HR and R&D at 70%+.
And marketing?
The 58% result tells us that CEOs do not appreciate, nor perhaps understand, the value of marketing. No wonder that we have been suffering death by a thousand budget cuts!
How to Market Marketing
Most of us in marketing spend a lot of time focusing externally on customers. We identify targets, build appropriate marketing programs to deliver our messages to them and get them to buy.
We also try to get our organizations' product or service regarded by our customers as an important part of their business or lifestyle. When we do this successfully we make the sale over the competition, usually at healthy margins too.
A similar approach needs to be adopted internally. The “customer” is senior management and the “competition” is the other departments that want funding. As a good marketer, of course you'll treat the other departments as “partners” rather than competitors. After all, they might share some of their budget if handled correctly. The next budget round could be very different. Marketers have all the skills to do a great job on “marketing marketing;” they just need a little help to get started.
The Internal Customer
Having identified that the internal customer is the CEO and senior management, the next step is to understand what they care about. The simple answer in today's tough environment is…avoiding getting fired--and thus delivering financial results. According to Business Week, the fundamental task of a CEO is simplicity itself: “Get the share price up. Period.”
So, no more telling senior management about how difficult it is to measure marketing activities. No more soft presentations on awareness, brand, image, loyalty, advertising, sponsorship etc. Relate everything to the goals of senior management and keep things as simple and short as possible. Senior management will not know what hit them--but they'll like it.
The marketing plan
How many pages in your marketing plan? The more pages you have the less likely it is to be read.
Several years ago I worked for a large IT company and, after a lot of hard work, my marketing team and I delivered the 48-page plan. At a subsequent team meeting I asked my staff who had read the entire document. Not a single hand went up. The only one who had read it was me, not even my boss read the whole thing though. The days of plans that need to pass the weight test are definitely over.
A good marketing plan should be no more than about a dozen PowerPoint slides that can be easily read, understood, and shared widely. It must support the overall business strategy and contain simple success metrics that link to the financial goals of senior management.
Keep the number of marketing programme low and incorporate all of the necessary components in each program. No separate programs or plans for PR, advertising, printing, etc. Internal customers are not really interested in how we marketing types do things; they just focus on the results.
External customers
How you ever been stuck in a meeting “discussing” something for hours but finding it difficult to come to an agreed decision? Here's a simple way to win the argument--sorry, discussion. Start your next sentence with “When I was talking to customer X they told me...” It works almost every time.
What about asking your customers what they think of your marketing plans? What about testing all major decisions against these two questions: What will customers think of this? How will this action help customers?
It puts a very different perspective on many things.
External customers are key to helping senior management meet their financial goals. They should therefore be the base of all metrics used to track the performance of marketing. This makes it much easier for senior management to understand the value and impact of marketing activities.
Finally
I want to end with one final thought. One way to measure your success with these ideas is if you find it easier to get and retain budget funding.
I'd like to suggest that you try something else too. Take the two questions used by Warwick University and ask your CEO and senior management to answer them now. (If you just skipped to the end of this article you'll have to read the whole thing to find out the questions). Go back and ask the same questions in six months and 12 months. A great example of customer-driven metrics!
