It’s time to find a bigger money box
Published on 09/15/2004 under Budgeting
At this time of year, most companies are in the early stages of putting together budgets for calendar year 2005. It’s time to start worrying about getting your fair share for marketing communications activities. For most marketing communications people, the concept of “fair share” is like a mirage in the desert--it looks like it might be there, but you’re not sure.
Have you ever wondered how marcom managers who appear to have generous budgets got that money in the first place? I do. I think about that a lot because you can’t do impressive, breakthough advertising without adequate budgets to implement that work.
Someone once said to me, “The greatest ideas in the world are worthless unless you can get the funding to put them in action.” (Or, maybe I said that to myself in a dream, but it makes sense, doesn’t it?)
So if you’re one of those starving marketing communications practitioners out there, hoping that 2005 will signal the start of something bigger and better, here are some thoughts on how you might go about it.
I’d suggest starting with the CFO. We’ve discussed this in previous columns, but the CFO is now, in most companies, the CEO’s most trusted adviser.
Obviously, the CFO is
These might be traditional indicators such as sales, market share or stock price increases, but you should also consider nontraditional metrics, such as brand valuation scorecards, customer satisfaction and customer retention levels. You’ll probably find the CFO hasn’t spent much time thinking about this subject, so one positive outcome of your chat would be to start him down that path.
The next step will likely involve some research. Now this is truly a slippery slope for marketing communications folks because most marketing managers have been through a massive research project or two. They know it takes a lot of time and is usually rather expensive. And, research might expose a weakness they’d rather not have exposed. So in general, they’re against it. But you can sell them on the need for research by simply pointing out that the CFO is interested in tracking the XYZ (whatever that might be), and the only way we’re going to do that is to establish a benchmark and do follow-up studies from time to time.
Your tracking study program will later serve as a shield against budget-cutting surprise attacks. When the budget-cutter approaches, you remind one and all of the deleterious effects this will have on the new marketing communications ROI tracking program. Tsk, tsk.
One more thing, while you’re in the research mindset: It doesn’t hurt to survey the sales force to find out what they think can be done to improve your competitive situation. The question I would ask is, “If we could change one thing about how customers perceive us or about the expectations they have of our company, what would that be?” Ultimately, the sales force needs to support whatever marketing communications you devise. It wouldn’t hurt to trace at least a portion of the program’s direction to suggestions from field sales.
The third step toward budget nirvana is to gather competitive marcom information and put a price tag on it. Nothing motivates business managers more than the scary idea that they’re being outmaneuvered by the competition. I’ve seen countless situations in which all the major competitors in a market category were quite happy to spend little or nothing on marketing communications, and then--wham--one company launches a major offensive and suddenly, everyone has to respond.
If you can’t find actual evidence of major competitive action, maybe just the rumored
Finally--and this is the trickiest one of all--you have to have a high-level champion who wants to do something significant. The CEO would be good.
I wrote a column a couple of years back (“The one question you should ask the CEO,” June 24, 2002, page 5) about the one question you should ask the CEO if you were given the appropriate audience. The correct answer was, “In five words or less, what is the image you’d like for our company to have?”
The “five words thing” keeps him from reciting the mission statement, and it eliminates extraneous words and multiple attributes that can’t be attained anyway. One way to turn this around is to scour the last several “president’s letters” from the annual report and see if you can use his own words to craft a five-word image statement.
If you already know what the ideal image statement should be (and most marketing communications managers worth their salt do), your job is to make the CEO think he came up with the whole idea. This shouldn’t be too difficult.
I like phrases like, “the integrated solutions company,” or “high-performance microprocessors,” or “your welding job efficiency experts.” In these examples, the ability to focus on one key attribute is understood.
You can use six or seven, or even eight words if you really need to. The objective is to get to an action-generating brand promise that becomes, on one hand, a beacon toward which all marketing communications activities are aimed, and on the other hand, a cornerstone of your marcom investment measuring program.
It may take several years for your budget to build to a level you feel is satisfactory, but you’ll never get there using the old percentage-of-sales or modest-increase-over-last-year methods. One percent of nothing is still nothing.
And if you have the top managers of your company thinking about the investment aspects of marketing communications, you’re way ahead. The “trust me” days of marcom budgeting are gone, and that’s really a good thing. It’s a lot better to ask boldly for the money you need and be accountable for the results of actions you initiate.