I have a lot of empathy for marketing leaders this time of year. Whether sales were up or down in 2022, almost every CEO and CMO is regrouping to look at budgets for 2023. Depending on a company’s financial health, this can be joyful and inspiring, with creative ideas flowing. Or it can feel like brutal spreadsheet jockeying to hit specific budgets and realign.
Marketing executives often ask me how to plan for and present budget discussions with their C-level supervisors and colleagues. My first response is to emphasize that marketing leadership needs solid answers to specific questions. Just saying “yes” to a request from a CEO or CFO to create a budget for 2023 and heading off to outline a deliverable isn’t an effective strategy.
Gartner reporting on CEO and CMO communications in the workplace shows respondents indicate a significant level of communication and strategic alignment between the two executive roles. In 2022, CEOs are consistently describing a back-to-basics mindset and asking CMOs to focus on customer acquisition and retention as well as strong brand building. As a result, marketing teams are tasked with building high impact measurable campaigns and branding that deliver tangible business value and results.
While CEOs and CMOs being on the same strategic page is always wonderful, the range of capability and budget restrictions within marketing departments present complex and often-challenging situations. According to the report, 61% of CMOs say they don’t have the team or resources in place to execute on the goals with which they are tasked. This is an area where CEOs and CMOs aren’t seeing eye-to-eye and that I frequently find when I dig a little deeper with marketing executives coming to me for advice.
I also frequently see that many CMOs get approval on a budget and plan they can’t meet or deliver on! Often, this ends in various webs of internal frustration and eventually company leadership viewing the marketing team as unsupportive, nonstrategic and unaligned. Communication around business priorities and marketing’s bandwidth to support them must be an open conversation initiated by the top. If marketing won’t get the necessary resources or investment to meet executive-level goals, the team needs to know that from their CMO, receive the reasoning for it and get firm direction on identified strategy to successfully deliver on goals with the staffing and resources on hand.
Any marketing budget is like a pie: Every division at the table wants a bigger slice. But this isn’t Thanksgiving dinner, and a CMO’s job is to ensure that the entire marketing engine moves the company forward and mapping to business goals regardless of the size of pie they’re served.
Here are the protective layers, key questions and cold-hard facts I advise CMOs to build into their annual budget planning process.
1. Corporate communications should focus on budgeting for company milestones, specific news, CEO internal comms and more.
- Investor relations: Keep a separate budget for potential M&A activity, funding and IR. You don’t want unexpected M&A news to pull marketing and communications team members from their daily work. Your staff needs to keep a steady cadence of product news, awareness campaigns, earned and paid media initiatives, conference investments, award submissions, speaking engagements and thought leadership activities always chugging along. Any disruption to resources on those projects should be pre-allocated for.
- Product news: Budget for this by division and agree on which divisions and products are expected to bring in the most revenue. Map this piece of the marketing pie accordingly.
Thought leadership: Keep executive profiles and their social channels buzzing with content and insight. You want to make it clear that your company is aware of customers’ pain points, understands the need to invest in the next wave of technology and is ahead of the game. - Crisis planning and communications: The entire organization must pull together on this bucket. Crisis work and issues management can bankrupt a company without a response plan that can be implemented immediately. Be sure you have the right plan in place to act fast with legal, PR, HR and the C-suite.
2. Every marketing budget should be customized to its company’s unique goals. To establish a goal-based B2B marketing budget, answer the following questions and identify required resources:
- Do you know your market position? Do your CEO, CFO and sales team agree with this position and the supporting research? Do you want to maintain this position or advance it? Do you know what your competitors are doing? Do you have a PR team maintaining the drumbeat with press, awards, speaking engagements and more?
- Have you identified the biggest opportunity for your company in its market? Which parts of the company will be the golden goose in 2023? Are these parts getting the right mix of support from your marketing budget and resources? Will other parts need to get less?
- What is the 2023 annual revenue goal, and what is the sales strategy for reaching this goal? Does your company have a list of target customers, where they are located, the shows they attend and a list of decision-makers to influence? How sophisticated is your effort to ensure these decision-makers are hearing your brand name, gaining insights from you and feeling strongly that you are the right choice?
- Are the marketing and sales team aligned and in one another’s monthly meetings? Is marketing sitting in on the monthly sales review to hit the revenue goal or just hearing about the good or bad news in the quarterly report? Who in marketing is mapping to the sales meetings? Are they strategic advisors or just note-takers?
- What is the average sale per customer, and how long does it take to close? How many deal closings are required to hit monthly revenue goals? How big does the lead pipeline need to be to reach that number? Is there a pattern that you can track for two years?
Do you have a list of top target prospects and their details in your CRM? Have you shared that list with marketing for drip campaigns that map to their specific interests? How much has that list grown, and who’s updating it? - If you have a robust marketing effort in place, do you have an unqualified-to-qualified deal ratio to measure the quality of prospects coming in? Have you evaluated if and how your brand image reinforces what’s working so you can make smart adjustments?
- How many inquiries are needed per month? You need to know the total cost per marketing qualified lead, whether it be networking at events, publishing targeted content and how much time sales spends on conversations with prospects.
3. When considering the most effective way to spend company dollars, consider these truths.
- Allocating a budget with eyes wide open means starting with data and mapping a B2B marketing and comms strategy first.
Once you have done this, you can effectively and efficiently divide the budget to fuel your plan. B2B companies that lack a clear, comprehensive marketing strategy are doomed to underperform, often forced to become reactive instead of taking the initiative. Marketing teams become order-takers in this position, and that’s an uninspiring role. Your strategy outlines who you should target, where you can find them and what message or value proposition will motivate them to choose you. Your marketing plan decides how to spend smart money to engage your targets and measure results. - A strong brand makes every marketing dollar work even harder.
Leveraging thought leaders and strong, visible subject matter experts are crucial to building a trusted brand reputation. Look at your competitors. How does the market perceive them and their spokespeople? Branding is the only marketing tactic that clearly separates you from the competition and makes your product or service an easier choice for customers. Don’t ignore the edge an exceptional brand reputation can provide. Sloppy, inconsistent branding kills sales. - Your website should be your hardest-working asset. Make no mistake: Every single lead will visit your website at some point during their buyer’s journey. Your public relations efforts, webinars and advertising all lead to the site, so what’s the data telling you? Your site should do all these things: resonate visually and inspire confidence, answer questions, build anticipation and convert interest into inquiry.
- The only effective way to generate awareness is to have a layered approach.
You need to get people’s attention before you can sell to them. Some call this air cover! Before you can make a sale, you must make a connection and advertising is how you do it at scale. A great ad serves as the start of a conversation. If your advertising is intriguing, you will attract the market’s attention. - Digital marketing with worthy content is still a big opportunity in B2B. Hands down, the best way to reach the right person with the right message at the right time along their buyer’s journey is digital marketing that repurposes press results, research findings and key insights that tantalize your target. A Deloitte survey revealed that marketing executives anticipate increasing their spend on digital and content to 54% in the next five years. However, digital remains an underused tool in B2B marketing because of its complexity as it requires investments in solid writing, video production, graphic design and list management and segmentation.
- People are coming back together, and events are still the best show in town.
Exhibitions make up to 40% of B2B marketing budgets for a reason. Fishing where the fish are can still be highly effective—assuming you aren’t just going through the motions. You must have a detailed pre- and post-event plan to make this spend worth it. Rely on a handshake to make a connection, but leverage technology to qualify and track your leads. - Marketing should be aligned to your B2B sales cycle.
Buyers are doing their research, so marketing must fill the role that prospecting and consultative selling used to play. Without sales and marketing alignment, your budget won’t go as far as it could. When your marketing and sales efforts work in sync and reinforce the same compelling messaging, you’ll see stronger results than any hodgepodge of tactics ever could achieve.
If you’re still looking for more advice on planning and budgeting for the upcoming fiscal year, Gartner has some nifty tools and reports that can inform you as you consider how you allocate your budget and ensure you aren’t blindsided by competitors that ramp up in areas you didn’t anticipate.
