Securing a robust marketing budget often requires a compelling business case. Explore the art of persuasion, the importance of data, and the power of a well-structured argument to win over stakeholders and secure the resources your marketing team needs.
Summary
Chief marketing officers are reporting increased pressure to prove the impact of marketing spending
- Too often this means a focus on short-term metrics, like sales revenue, instead of longer-term efforts like brand building
- To achieve their long-term strategic goals, marketers need to help the CFO and rest of the C-suite think beyond the short term
Create a full funnel view
CMOs should understand CFOs’ preference for financial data to assess success of marketing investments, creating a funnel-wide view of how marketing is delivering value in each part of the funnel and, importantly, demonstrating how it will be measured with clear ties back to business strategy.
Run experiments
Run an experiment using a control group that does not get marketing spending.
- The goal is to build a strong understanding of the counterfactual – what if marketing spending had not occurred?
- This might be done in small-scale experiments in the field or in the lab.
Appreciate the metrics-to-budget connection
41% of marketing budgets are based on the previous year’s expenses and adjusted during the year if needed
- 10% are revisited every month or quarter
- Metrics are not collected as often as they should be, and measurement rates drop off dramatically for other metrics
Explain hypotheses
The best marketing leaders have a logic based on experience and data regarding how marketing spend will impact various business activities and outcomes.
Move to an investment mentality
CMOs need to orchestrate a balanced portfolio of marketing investments to drive measurable results
- This requires customer and brand metrics that tell the long-term story, a funnel-view of marketing spending that points to what is driving the business, and experimentation that can guide agile actions
Measure impact on brand and customer metrics
There is no room for a black box when making the case for marketing spending.
- Marketing leaders must show their impact on KPIs associated with the brand & customer relationships
- Most companies need more regular collection of these metrics
Collaborate with your C-suite peers
Monthly meetings of the senior management team are unlikely to be the best environments for making the case for marketing spending
- One on one, in a setting where the CMO offers evidence and logic for spending, while addressing important questions
- Non-marketing leaders will appreciate that marketing is an investment, not just a cost
Build the business case based on alignment with business priorities and strategies
CFOs want to know what marketing dollars are actually going to do for the business
- Marketers should be able to answer the questions
- How does marketing spending marry up with what is most important to the future of the company?
- What are our strategic goals and how does what we are doing from a marketing perspective get us to that goal?
Build a business partnership with the CFO
Only 35% of marketers use an integrated marketing team
- 77% say they have an integrated team approach
- When marketing and finance work together more closely, there is an opportunity for better planning, more informed decisions, and more agile reactions
- MillerCoors created a role, senior director, Marketing Finance, that reports to both the Chief Financial Officer and Chief Marketing Officer
Don’t ignore the impact of marketing on costs
Satisfied customers are more responsive to brand marketing and sales efforts, more open to future company offers, and more likely to share positive word of mouth – netting, on average, a 3% savings in future expenditures.
