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5 marketing budget strategies to maximize your dollars
Experts suggest that businesses build well-constructed budgets and create talent roadmaps to determine whether they are hiring the best people to reach their goals.
Marketing departments annually face a true test of delivering a golden message to customers on budgets worth less than a single bar of gold. Marketers must make tough choices about the frequency and scope of campaigns, the purchase of technology and the number of employees to pull it all off.
A well-designed plan, however, can help deliver the most bang for a marketing budget.
By following these five marketing budget strategies, as shared by some experts, a marketing department should see a return on investment.
1. Build a proper budget
A homeowner won't expect a poorly built house to last long, yet marketers seem to think they can market effectively with budgets that aren't properly constructed, said Ewan McIntyre, a vice president analyst at Gartner.
Most marketers don't know how to build a proper budget, according to a Gartner survey. Marketers shouldn't get as deeply entrenched into budgeting as the finance department does, but they should at least implement zero-based budgeting, meaning each fiscal year every expense must be justified for that year alone, McIntyre said.
"Otherwise you have long-standing programs that receive funding but no longer make sense to have, or you're financing something with performance criteria that's out of date," McIntyre said.
With zero-based budgeting, every piece of marketing operation is a "won business case" that applies to what the department is doing in that moment, creating a flexibility to pursue new projects. Even if the marketing staff doesn't have the accounting chops to create a detailed budget, McIntyre still suggests trying.
2. Determine marketing customers
Just as zero-based budgeting forces marketers to focus on the legitimacy of expenses, determining a precise customer base compels marketing departments to recognize that the money spent on a certain type of customer may not be worth the pursuit. If organizations don't know who their customers are, they'll never maximize their budgets, said Eran Livneh, president of MarketCapture, a marketing services firm.
Eran LivnehPresident, MarketCapture
That's why Livneh helps his clients define the ideal personas and then tries to identify, by name, the customers that fit those personas.
"We look at it as a bull's-eye. The decision-makers are in the center, those are our primary targets," he said. "Then you have people outside the bull's-eye that influence the purchase, and even those outside the company, like partners who influence the marketplace."
It's critical to know and understand the people in the center and to know customers by name, Livneh said.
"When you have a name of a person who you're marketing to, then you can make the most of your budget," he said.
3. Get a handle on your data
Many marketers still wonder why they have poor open email rates, said Laura Ramos, a vice president and principal analyst at Forrester Research. Many customers find generalized messages inappropriate or irrelevant, and marketers need to get smarter so they can send the right messages to the right customers. Only data can bring that sort of intelligence, she said.
It's tough to acquire accurate customer data, integrate into a marketing system and then have the confidence to act on it, Ramos said. Poor data cleansing, data management and data governance haunts many marketers. Remedying those areas is a critical step, Ramos said.
Accurate data can reveal if a market is ready for a new product or if it is saturated. Insight on segmentation, and the customers and markets that fall within those segments, is the proper focus marketers need, she said. Once marketers obtain this data, they can employ their marketing budget strategy.
4. Don't buy the wrong technology
Technology gets about 20% of a marketing budget, but data suggests marketers aren't getting the most of that technology, either through misuse or underuse, McIntyre said. Marketers can think of technology purchases as buying green vegetables for dinner, he said. It's not so much the newest, flashiest martech product that will deliver results but rather the one that aligns with a company's KPIs.
"Learn what your IT leaders are doing and build a strategic view of what other IT investments look like," McIntyre said. "Make sure you are landing tech not based on the aspirations of capabilities your organization wants to have, but instead the capabilities you have today."
5. Invest in the right people
As Agile marketing gains favor in the industry, having the right employees in place has greater significance, McIntyre said. This means striking the right balance between what's available in the labor market and what a company's core labor demands are.
An organization will have a strong understanding of what type of employees it needs if it creates a talent roadmap, he said. With a talent roadmap, companies can see if they're aligning the people they hire with their marketing budget strategies.
"You need to have a serious, proactive discussion about how much it might cost to attract and acquire this talent, if you are willing to invest in [people] of material importance," McIntyre said.
Enterprises spend about 23% of their marketing budgets on outside marketing agencies, and it might be time to reevaluate that spend, McIntyre said.
"Be proactive if the value of agency is no longer great," he said. "If [you're] proactive, you might find other agencies [that] might be able to bring this in on a reliable cost basis."