Sales driven Marketing

OK, times are tough and the Financial Department has taken the slasher to marketing budgets; so what next? As a Client of mine recently told me, "I am not used to such small marketing budgets"! This was before she left and joined another company (presumably with larger marketing budgets).

Smaller marketing budgets are quickly becoming the norm and for good reason, and as a leader of your area, you could do worse than being proactive about re-cutting your budget. So how do we adjust to this new world of smaller marketing budgets and how do we continue to achieve the same or better outcomes from the smaller investment?

Simply address these three points, (the first one is obviously nothing new):

1. These are indeed tough times so go and re-negotiate your suppliers down as they will do almost anything to keep your business (in fact we recommend, unless you have already done so, go and get third party quotes as well).
2. Get rid of any market research expenditure which is a waste of time, if;
• you are able to capture the feedback from your sales-team. If you have not, this is a great time to institute formal feedback mechanisms for your sales executives; they are a gold-mine of direct customer feedback.
• your organisation enforces the appropriate use of a CRM system. In today's world, it is unacceptable for any organisation not to have an effective CRM system. It costs very little (compared to any market research you are currently funding) to get a SaaS CRM system such as salesforce.com. The next thing is to ensure it is being utilised effectively.
3. This is the key step. Renegotiate a different approach to marketing budgeting and gear it around sales. We find an effective way is to ask for your standard budget on the basis of the organisation achieving its projections for the year. Then get the organisation to commit to 50% budget and the balance extended to you on the basis of results. Furthermore you should have no ceiling so if the organisation overshoots its projections, you continue to receive extra marketing funds. The formula would look like this;
• P=Projection, B=Marketing Budget, A=Actual Revenue
• then; B=((B-(B*.5))+((A/P)*(B*.5)))
• ideally calculated quarterly.

If you are thinking that this is nonsense, then think again. In our experience, many organisations (mainly successful up-and-coming ones) have adopted this, or similar, mechanisms and so you really have no choice.

Aldo Grech - CxO Consulting