The current economic climate has made the process of developing – and sticking – to a marketing budget a precarious proposition. In most circles, budget scrutiny has never been more pronounced and accountability has never been higher. The temptation is for marketing executives to throw their hands up and simply allow market forces to take over to determine budgetary levels. But this strategy comes with immense risk. Control of the process is forfeited and the buyer no longer commands the next steps. It is akin to permitting your dance partner to always be the lead regardless of the dance floor and the music. You’re just going along for the ride. (Broken toes, anyone?)
There are a number of steps you can take regain control of your budgeting protocol. While the following ideas may not be appropriate on every occasion, these approaches can help give you the confidence to handle your budget on your terms.
Determine Your “Must Have” Priorities. It is a lot easier to assign price points when you figure out what specific components of the service or product you are purchasing matters most to you. What are the things you absolutely must have in order to go forward – everything else can be relegated to Phase 2, Phase 3, etc. Perhaps you are negotiating for a new website. Are you most concerned with the back-end coding and programming or does the site design remain paramount to you? Once you make that decision, you can decide where you need and want to make the biggest financial commitment.
Invite Your Vendors to Be Part of the Process. Consider asking your vendor straight out how they would recommend pricing the service sought. Have them explain to you the myriad of costs involved and which items can be negotiated and which simply cannot. Use the vendor meeting as a chance to become fully educated about all that is entailed in your purchase. Need the impact of a full-page print ad, but don’t have the budget? Ask your agency or consultant to explore the best alternatives and report back to you. Need to make a cost benefit analysis between original and stock photography? The world of stock photography has changed markedly in the last decade. Get the skinny on the latest. By bringing the vendor to your side of the able, you establish a true partnership and put your agency’s expertise – and network of resources – to its best use.
Reverse Engineer. Many companies tend to work from the inside out when it comes to making budget decisions. What worked last year? What does our staff think we need to do? What’s the biggest complaint we hear from our sales force? While this line of question is perfectly sensible and certainly has its place, you may want to consider focusing squarely on your best customers first. What do they have in common? Similar industries or verticals? Were they all confronting a similar problem or challenge? Do they share a common business philosophy or style that makes your company attractive to them? Next, think about how you were able to entice these customers. Were they primarily blind contacts that came through your website? Were they qualified referrals from some of your other top customers? Did they respond to a targeted direct marketing campaign? It might be that you met them at a conference or a convention. In any event, by carefully profiling your top customers you can create a remarkably effective filter for making truly informed budgeting decisions.
***
These are but three of many steps you can take to establishing a viable, manageable marketing budget. Even in this seemingly unforgivable budget environment there is no reason to be a wallflower and not get on the dance floor to make it happen.
The current economic climate has made the process of developing – and sticking – to a marketing budget a precarious proposition. In most circles, budget scrutiny has never been more pronounced and accountability has never been higher. The temptation is for marketing executives to throw their hands up and simply allow market forces to take over to determine budgetary levels. But this strategy comes with immense risk. Control of the process is forfeited and the buyer no longer commands the next steps. It is akin to permitting your dance partner to always be the lead regardless of the dance floor and the music. You’re just going along for the ride. (Broken toes, anyone?)
There are a number of steps you can take regain control of your budgeting protocol. While the following ideas may not be appropriate on every occasion, these approaches can help give you the confidence to handle your budget on your terms.
Determine Your “Must Have” Priorities. It is a lot easier to assign price points when you figure out what specific components of the service or product you are purchasing matters most to you. What are the things you absolutely must have in order to go forward – everything else can be relegated to Phase 2, Phase 3, etc. Perhaps you are negotiating for a new website. Are you most concerned with the back-end coding and programming or does the site design remain paramount to you? Once you make that decision, you can decide where you need and want to make the biggest financial commitment.
Invite Your Vendors to Be Part of the Process. Consider asking your vendor straight out how they would recommend pricing the service sought. Have them explain to you the myriad of costs involved and which items can be negotiated and which simply cannot. Use the vendor meeting as a chance to become fully educated about all that is entailed in your purchase. Need the impact of a full-page print ad, but don’t have the budget? Ask your agency or consultant to explore the best alternatives and report back to you. Need to make a cost benefit analysis between original and stock photography? The world of stock photography has changed markedly in the last decade. Get the skinny on the latest. By bringing the vendor to your side of the able, you establish a true partnership and put your agency’s expertise – and network of resources – to its best use.
Reverse Engineer. Many companies tend to work from the inside out when it comes to making budget decisions. What worked last year? What does our staff think we need to do? What’s the biggest complaint we hear from our sales force? While this line of question is perfectly sensible and certainly has its place, you may want to consider focusing squarely on your best customers first. What do they have in common? Similar industries or verticals? Were they all confronting a similar problem or challenge? Do they share a common business philosophy or style that makes your company attractive to them? Next, think about how you were able to entice these customers. Were they primarily blind contacts that came through your website? Were they qualified referrals from some of your other top customers? Did they respond to a targeted direct marketing campaign? It might be that you met them at a conference or a convention. In any event, by carefully profiling your top customers you can create a remarkably effective filter for making truly informed budgeting decisions.
***
These are but three of many steps you can take to establishing a viable, manageable marketing budget. Even in this seemingly unforgivable budget environment there is no reason to be a wallflower and not get on the dance floor to make it happen.
