Marketing Budget Calculator: How much should it really be?

Marketing Budget Calculator

When I was running marketing in Europe, I wished there had been a ‘Marketing Budget Calculator’ that I could use that was based in real logic. Instead, as is so typical in many organisations, finance issued a budget that was based on nothing more than a very modest revision of what was allocated the year before. If last year’s allocation had been fantastic, that wouldn’t have been such a problem. But budgets were so far under what they should have been each year, so finance’s approach piled more misery on us than we’d faced previously. Sales, of course, had bigger targets. They were expecting us to contribute much more.

I would go through the motions of building a detailed budget, based on the reality of how much things cost, and the returns we had seen in the past. I would put in for a number that was significantly more than I had had in previous years. Finance would say no. Sales would demand that we contributed towards more of their new business pipeline target than was even possible with a budget twice the size.

This may be a scenario faced by many of you. The problem was, while I had data about what realistic budget allocations should be, I didn’t have a way of showing it in an easy to digest way.

I have now spent some time building a calculator, in which you can plug your revenue for the previous year, target revenue for the next year, and it will calculate your growth. Based on a load of complicated formulas, it will then show you what percentage of revenue should be spent on marketing. It further breaks this down to show budget based on programs and personnel. The data model behind the tool differentiates between companies of different sizes – $0-100M, $100-500M, and $500M-$1B. The variables will change depending on which group your company falls into.

The calculator will also show you how much of the incremental revenue should be contributed by marketing (vs sales). It is fair to say that not all companies’ marketing functions are as well developed (or not) as each other, so you can also choose whether you would rate your function as poor, average, or high performing. Be honest here. If your company’s marketing team is small, and you haven’t yet got your act together on many aspects, you should probably pick ‘poor’. If on the other hand, you have a well organised marketing calendar or great content marketing, integrated into social media, and other channels, with full marketing automation, you should choose ‘high’. Anywhere in between and you are ‘average’.

The calculator has used data from a number of different sources, including research carried out by Sirius Decisions.

What this calculator can do for you is help you understand, and articulate easily what the budget should be (based on research and evidence) to achieve the goals being requested. It will also make sure you are not forced to commit to marketing pipeline contribution which is simply impossible to meet. Lastly, it will enable you to have a conversation with both of these factors represented together. If the budget you are given is lower than it need to be, then the amount you can contribute to the pipeline will also need to be lower, and vice versa.

Have a play with the calculator and see whether it is useful for you. I’d love to hear back from you with any comment or stories.

Input data into the green cells, and the rest will calculate automatically for you.

 

https://dl.dropboxusercontent.com/u/12894395/Marketing%20Budget%20and%20Pipeline%20Calculator%20copy/Marketing%20Budget%20and%20Pipeline%20Calculator.htm

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Sales and marketing alignment – if they aren’t aligned then who wins?

Sales and marketing alignment

Sales and marketing alignment is so often an after thought, if it’s a thought at all. How many of these do you recognise?

“What are marketing doing? I have huge targets to hit and they are worrying about the font and colour of the corporate presentation. Why aren’t we getting any well qualified leads through that I can get in there and close?”

“We’re trying to run these campaigns, and yet sales won’t give us the data to add to our mailing list. If they don’t provide their customer and prospect contact details, we can’t be expected to generate the demand they want. I just don’t understand why they don’t want to work with us more.”

“The slides created by marketing aren’t quite right. I’ve added my own slides, and changed a few of the facts and figures around. It’s better now. I don’t understand why marketing don’t just give us what we need. They don’t seem to get what it’s like in sales.”

“Whatever we give sales, it’s never good enough. They complain and then change the material we provide them. We must have at least 50 different versions of the new corporate story by now. How are we supposed to ensure that the messaging is right when they treat everything as the Wild West?”

This is something I have faced throughout my career. As a sales person I looked at marketing and wondered what on earth they were doing that was relevant for me, and as a marketer I saw sales protecting their own customers, data, and environment and keeping me out.

The bottom line is that sales and marketing have exactly the same ultimate objective – to sell more services to existing customers and to attract new logos. The problem is that they are two different types of character, with two different sets of process goals along the way to the ultimate joint goal.

Aligning sales and marketing (and product) and creating greater collaboration helps to speed up the journey towards attaining the new business needed. Imagine both sales and marketing collaborating fully on lead generation initiatives, follow up with the prospect or customer, and on the development of messaging and campaigns. A sales person is likely to know more about the customer challenges and environment than anyone else in the organisation, and marketing are crying out for that information in order to develop more targeted messaging and campaigns. Marketing are the custodians of the messaging and collateral, so sales being involved at its creation stage would greatly enhance the effectiveness of any material, or campaign.

I work with sales and marketing teams to align their goals and working practices through joint workshops, followed by one-to-one coaching. I also bring new technologies to them that can act as catalysts, or the common watering hole, around which both teams can gather to further their joint ambition to generate more business. If you could do with a look at your sales and marketing alignment then I can help you develop common ground, better working practices, and a lead to opportunity process that everyone is happy to support.

Forget the customer value and forget any ROI

Customer Value

One thing I have learned is that if you forget the customer value, you can kiss goodbye to your ROI. How does the following resonate with you?

The guys from product have just come up with a new feature release. They tell you it means that customers can see their data in seven new ways, and that they can do all of that through a self-service portal. The product guys are pleased with themselves because the self-service portal pushes a number of things onto the customer, meaning that they have less manual work to do. They go on to tell you about the 17 new features and how technically cool they are. ‘Wow’, you think, ‘these guys really know how to create some great features.’

You leave with a list of things that the product does today that it didn’t do yesterday. Things you can tell your customers about. They are bound to think they are as cool as the product guy did, after all they buy technology all the time and can surely see just how great these are.

You spend thousands of dollars on a campaign to boost the awareness of the new features, and feel great because you’re meeting your objectives of having new stuff to talk about to customers, and will generate at least 20% of your annual MQL from this one campaign alone.

A couple of weeks later you have your head in your hands, and are in front of the CMO, trying to explain why your open rate was low, and the click through rate non-existent. Your ROI looks shot on this campaign, and your CMO is not happy. Not one bit.

As you crawl back to your desk, you try to work out what went wrong. The features were cool, but no-one seemed interested. You call your colleague and coach for their advice. After a few minutes listening silently, they ask you, “What does the customer need?”. You stop short and don’t have an answer. It’s then that you realise your mistake. Instead of focusing on the customer’s need and relating this back to your new features, you simply went ahead and pushed a load of meaningless things at them.

I see this scenario almost every day. Product, Marketing, and Sales not well aligned around the customer. And let’s be clear, the only reason you sell products or services is because a customer perceives that they address their requirements, be those opportunities or problems. Smart companies centre their product, proposition, and offering development around customer needs. Positioning then becomes easy. If you really understand your customer’s business, their needs, and market challenges, you can tailor your offering accordingly. If you then understand your purchaser’s persona, you can tailor your messaging to address their needs.

I work with clients to develop a deeper understanding of their customers through workshops, developing user scenarios, and mapping customer needs to the portfolio, so that they accelerate their sales and marketing performance, and deliver the ROI that the CMO needs to see. Focusing on customer value is key.

How to Turbo Boost Your Sales Team

It’s 0830am on a Tuesday morning and the sales team is out and about getting ready to meet with their clients or prospects. In thirty minutes’ time they will be with their contacts finding out about the client, discovering what makes them tick and analysing the problems the client’s business has in order to reel them in towards a sale.

At 0930am chunky laptops come out of bags and are put on the table in front of them so they can huddle around the screen, or are hooked up to hot, wheezing projectors that don’t want to recognise the computer. This rigmarole takes a good 5 minutes, or more if the projector is in a bad mood, and breaks rapport. The conversation has stalled and all the good work the sales person has done to this point is either negated at worst, or severely depleted at best.

Once the laptop is booted up and all eyes are glued to it, the search for the version of the presentation that’s been created for the meeting starts. Once found, the conversation can turn to the content and the sales person starts to claw back to where they were before the clunky interruption.

The sales person will no doubt do a fabulous job with the client, mixing their art, experience, skill and intuition in just the right way to reel them in. But is there a way of turbo boosting sales? A way to make their very hard jobs much easier?

There are two issue with the typical Tuesday morning above:

1.  The content they are using for their meeting is more than likely different to the content being used by all their colleagues

    • Does it matter that the content is different? If I were just talking about the use of different product sheets for different products it wouldn’t be an issue. But the fact is that most organisations do not have any structure or control over their collateral, its distribution or how it’s modified and used. If every sales person is using a different version of the corporate presentation, some with incorrect facts, others with information that breaches confidentiality, still others that breach the brand guidelines, then the answer is yes, it does matter if the team, all of whom are representing the same company, are doing so in an inconsistent manner.

2.  The interruption to their meeting causes a break in their rapport and sales process

    • Let’s face it everyone hates the technology in a meeting room, as it so often doesn’t do what you want it to. Everyone accepts that things don’t always connect up right first time. But it is awkward for everyone. An awkward silence as one person struggles to make it work while the other just waits saying ‘no it’s fine, take your time’, when both of you know they really mean, ‘come on, I haven’t got time to waste’. We all know that building rapport and maintaining it is crucial in human interaction. Sales people are naturally better at it than most other groups, and have no doubt been on training courses where they have been told about the classic NLP techniques of mirroring, pacing and leading. Some of them may even implement these well. But an interruption like technology turgidity can break state and set the meeting back. (NB. It is true that print-outs can be made before the meeting to avoid techno trauma but there is an even better way to put the right information in front of your customer as we shall see).

In my role running marketing I used to have sales people craving new content all the time. They’d want new ‘hooks’ and good stories. However, they would also then modify whatever we produced. We’d create one version and within days there were more than twenty floating around. No-one had any idea what the correct or most up to date version was. It was like the Wild West. Marketing, Brand and senior management had no control and no structure over what was out there or how sales people were representing the company. One thing was certain through, there was zero consistency.

One way to overcome these issues is to deploy Content Live, a new application designed to right the two wrongs in our illustration. Content Live is an application that sits in the cloud where HQ (marketing, sales, brand, etc) can upload content and it is automatically pushed out to every account holders’ iPads. Instantly this provides a structure to the sales person, and the whole organisation; they know what is official, what is the latest and where to find it easily. It also provides control because the files uploaded can be locked so driving consistency of message and delivery.

As the content is already sitting on the sales person’s iPad, always refreshed 24 hours a day, there is no need to go through techno trauma or break rapport with a client. How simple is it to take out the iPad, swipe the screen and show the right content as part of a natural conversation? Very. Imagine how powerful it could be for a sales person to be talking to a client about their issue and the be able to say ‘We just did a very similar thing for Big Bad Brummies PLC. Here’s a quick 2 minute video of their CIO talking through their challenges and how they overcame them’. Very powerful indeed, as they swipe the screen of their iPad and play the video in the meeting as part of the sales conversation. After all there is no better sales resource for a company than a happy customer.

Importantly, the sales person will also have their own space in ContentLive where they can upload any documents that they do create. Of course it is right that the further up towards account based marketing (ABM) you get, the more likely it is that content will be modified, but with Content Live it is all structured and controlled and visible.

There are other add-ons too, such as ‘News You Can Use’ which provides the latest news on clients direct to the iPad, and also Content Live Private which enables you to have a private shared space with clients or suppliers where content is automatically pushed to their iPads. Imagine how cool it would be to walk into a meeting having just picked up the latest news on them seconds before so you can be the most informed possible, or how you could submit proposals, presentations, service management reports or implementation plans directly onto their iPads. Very cool I say.

http://viewidc.com/flimp3_player.swf?u=p7v6q0mx

Content Live is an application that enables the slickest and simplest way to distribute, structure and control the content. Many organisations will need to work on how they would structure and modify their content to use Content Live to its full potential and this is something we can advise on at Accelerate Performance.

For more information on Content Live or who to engage with for development and structure of content please contact us.