Surprisingly, you might want to start from the middle! In B2B tech industries, quarterly reviews are essential. If you haven't done so already, the end of Q1 is a good time to weigh in on strategies and agile budget tactics towards the next busy quarters.
But if you're looking for a magic bullet, there's no perfect answer.
Let's drill down into across-the-board takeaways and weigh in on the budget traps and rabbit holes.
The 'Meet-Me-in-the-Middle’ strategy adopts a more fresh and agile approach to marketing budgeting, from the top-down to bottom-up.
From one end, Top-Down, budgeting is usually a company strategy, driven by the CEO and finance budget guidelines. The top-down strategy is usually metrics-driven.
At the other end, Bottom-up strategies review what tools and tactics really generated success, let's say in 2019 (less so 2020). It then focuses on what delivered the best ROI, and what didn’t.
How do you balance between the two?
The balance of power over budgeting often plays out between an organisation's board, the marketing team, and sales. For instance, the board may have earmarked a specific event, the product marketers could be vying for a bigger launch budget, and the sales team, well, they will always insist on bigger budgets.
A fresh look at marketing ROI
When evaluating a previous year's marketing activity, it's a good idea to begin by defining who is a contact. Equally important is the need to work out how many relevant leads were created per marketing activity, whether it was a webinar, digital campaign, or end-of-year event.
The next step looks at reviewing how many leads emerged as MQLS, SALs (Sales Accepted Leads) and Opportunities. On the other hand, you'll need to account for how many turned out to be bottom-of-the-barrel fish bait. After gathering the data, the next step to figuring out the ROI is to calculate the total opportunities, divided by market spend.
What is the best formula for improving budgeting results?
During 2021, it pays to focus on your big-budget anchors and ask these hard questions:
Which high-spend items are going to help you to create those memorable ‘Neil Armstrong Moments?
How can you ensure your budget for high spend items is managed efficiently while maximizing potential results?
At the end of the day, being a successful marketer isn’t necessarily about how much you spend — it’s about what you do with the budget allocated to you.
Here are the main takeaways:
1. Be where your customers are When choosing an event to attend or to sponsor, online or off-line, it’s important to realize whether a potential customer is attending for learning or for purchasing purposes? Of course, other key parameters including the stage in the company’s lifecycle. The buying persona and industry can vary, depending on the needs of each company. One of the best examples cited by a colleague of mine in the cybersecurity industry is the dilemma of choosing between the top annual global cybersecurity event of the year; RSA, which generated only two opportunities for the company, vs. the focused yet expensive roundtable events, which tended to pull in POCs, even though the volume of leads were phenomenally less.
2. Create an annual budget, but always plan two quarters ahead.
In the IT industry, in particular, budgeting agility is the name of the game.
Although it's hard to go rogue on the annual budget plan, a highly detailed plan of what marketing wants to achieve in the next two quarters could be more realistic.
In a disruptive industry, there is no point in allocating a budget at the beginning of the year for the end of year activities when the 'expected unexpected' can blow your organisation and budget in a totally new direction.
3. Budgeting for an A-team locally and globally
Leveling up with the right team for the right activity within the right time zone is key. For instance, lead generation can work well when the inside sales rep, or ins some companies, the SDR (Sales Development Rep), is positioned within the marketing department.
If the SDR works under sales, the role is often unrealistically expected to generate bottom of the funnel, POC-ready leads, even following a white paper download.
In many IT industries, where the buyer personas are already immune to calls, this position under sales is doomed. The ideal marketing A-team therefore would comprise of the SDR, an awareness driven Marcom, product marketing and marketing operations.
4. The bottom line
In the IT industry, quarterly reviews are essential, especially for finance. Most finance units need to plan and review monetary liquidity throughout the year. On a micro level, it’s a good idea to review each budget item and consider its impact on marketing results. One of the most important KPIs to compare would be; the actual vs. planned budget spend per item.
So, what will be your Neil Armstrong moment? How do you intend to track your budget success in 2021?
If you and your team want to level up your marketing budget know-how to ensure the best possible ROI in 2021, feel free to reach out to us today.