If you’ve done marketing planning, you know that budgets are typically done around a percentage increase that you can justify based on your current spend. As a good steward of my company’s finances, I like to cut cost wherever possible. On the flip side, I don’t like to be punished for good behavior. The current budgeting cycle does not account for how the company is expecting to grow. Most marketing plans and budgets are a “rinse and repeat” of last year’s plan with minor tweaks.
At DreamForce (you can read my full recap here), I experienced the best session I have ever had the pleasure of attending in my career, “5 Key Traits to High Performing Marketing Organizations” by Author, Keynote Speaker, and Marketing Insights at Salesforce, Mathew Sweezey. The session covered a lot of valuable information for marketing leaders–get the slides here. In the session, Mathew introduced a new and creative way to secure approval for an increased marketing budget by basing it on projected revenue, not current spend.
Where to Start
Before you move into planning, ask your CEO or Sales VP how the company is expecting to grow in the next year. From there, you can gauge how much money you need in order to scale your organization, programs, and technology to achieve that goal.
At ReachForce, we are a startup and fast growth is just the name of the game. So I am looking at requesting upwards of 30% of projected revenue for marketing (gulp).
But this shift in the budgeting process will likely have finance asking what world do I think I live in where I can get a 30% increase in my budget. So rather than negotiating with the enemy (J/K I love our finance team. Hi Angel, Terri, and Ana!), I should go with the old adage, “The proof is in the pudding”, and introduce the concept of a stretch budget.
Yes, mind blown.
Here is what that would look like:
What will this look like for ReachForce? I am a big fan of agile and the concept of the stretch budget fits really well within that concept. This year we will be experimenting with different content and events that will shake up the “but we always do x” mentality that many organizations have adopted. I will take this quarter-by-quarter and shift my spend and allotment as we demonstrate those tactics.
Do yourself a favor and go follow Yes-that-is-his-real-name, Mathew Sweezey on #allthethings. Sweezey has great, well-researched content that is not only informative but extremely engaging. His headline on LinkedIn says it all, “Marketing is such a dirty word these days. I’m just trying to clean it up and give it a second chance.” So give him a follow to help clean things up.