Oh, the pain of the marketing budget. You can feel it, right? When it’s time to propose your investment recommendations for the year—or revise them for the quarter—tensions start to rise.
Pile on the threat of recession, and marketing folks face some extra-difficult conversations with business decision-makers.
If you’re a marketing leader, and you’re forced to “defend” marketing investment, how can you best approach it? Or, if you’re a CEO responsible for allocating marketing investment, can you feel confident being on the pro-marketing side?
What Happens When You’re Met with Resistance?
The Drum contributor Samuel Scott presents an interesting take: “How marketers can ‘speak CFO’ to survive the recession.”
It’s a valid perspective. Marketing serves as a primary consumer-centric arm of a company. Its purpose is to communicate value, provide solutions to customer pain points, and optimize the buyer journey. And, given the right investment, marketing can do all of those things.
But, when I’ve asked CEOs and business owners about investing—and I mean actually putting their credit card down and spending money to make money—I’m often met with excuses. Here are a few responses I’ve received from C-suite leaders…
I will invest when:
- “I’ve tried to do things on my own where I clearly don’t have the requisite skills or experience.”
- “I can articulate how many new customers it will take to pay for the investment.”
- “The investment relieves me of the thing that keeps me up at night.”
- “I see where I’ve put an investment off in the past, and wish I hadn’t.”
- “I’m confused or uncertain about exactly what I need.”
- “I’m engaged with multiple options and have trouble deciding between options.”
- “I look back on past investments with regret.”
- “I’m unsure of the precise problem I need to solve.”
There are different ways marketing leadership can approach financial discussions to diffuse these excuses when they come up in the negotiation.
Learning the CFO/CEO Language
One effective approach is to help CFOs and CEOs differentiate long-term and short-term goals—and really define them past broader umbrella objectives like “growth.” What does growth look like in the long term? What is most important—first and foremost in the CEO’s mind? That’s going to reveal a lot about the feelings she has around marketing spending.
For example, if it is acquiring a piece of another company, what do you need to do for that to happen? You might break it down this way:
X amount of dollars is the revenue you want, which means you need X number of new customers. Determine your conversion rate so you know just how much needs to be invested in marketing to get a top-funnel lead.
If that math uncovers a $500,000 marketing budget and you only have $250,000, the conversation with your CFO has to be a realistic one. “This will limit our growth for the year. It’s actually going to take two years to accomplish what you’d projected.”
Helping CFOs understand what things cost and the time it takes to achieve goals is essential for setting reasonable expectations about the budget in play. We know big budgets can do broader things. There’s more waste, but they generate awareness. If you don’t have the money, a strategy like email marketing is cost-effective and one-to-one communication.
What does growth look like in the long term?
Another piece of these conversations is to understand that whatever you are requesting for marketing spend is a zero-sum game. If marketing gets more money, some other part of the business gets less:
- travel budget
- new software to generate efficiency
Recognizing this fact better prepares you for resistance from the C-suite. It gives CEOs and CFOs confidence when marketing can acknowledge its place as part of a greater business strategy—and that marketing doesn’t exist in a vacuum.
Sometimes, internal marketing has difficulty stepping back and looking at the broader picture. That’s when an outside perspective can be helpful. Here’s how I can help:
- See my videos on marketing strategy on our YouTube channel—and don’t forget to subscribe so you get the new ones in your inbox. In particular, check out this one: How to Recession-Proof Your Marketing Investment.
- We’ve launched a newsletter on LinkedIn with a deep dive on topics we’re all thinking about. Take a look here.
- If your team needs a strategy primer to finesse your current strategy roadmap, get in touch so we can set up time to discuss timing and cost so you're in good shape throughout the rest of Q2 and into Q3.