Customer Conversations: Taking the Budget Conversation from Effort to Impact

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In a recent conversation with one of our customers, a VP of Marketing at a well-known Imagecompany, we discussed the challenges associated with her leadership’s request to submit the fiscal year’s budget before her team had finished the planning process. “Without a plan”, she asked, “how can the right investment be determined and requested?” Before it was even complete, her budget was under fire, and there was the concern that no matter what number was supplied, the budget could be cut back. Understandably, frustration ensued.

This very situation is an example of why it is so important to build a measurable marketing plan that is directly aligned with business outcomes. Once the outcomes are identified and it is understood which ones Marketing is expected to impact and how, the conversation shifts from talking about activities to talking about business value.

Here is the advice we offered, and perhaps you have some additional thoughts:

  1. Comply with the request. If you can, avoid allocating dollars by activities. Rather, try to allocate the dollars by marketing objective.
  2. Finish the plan, including the required investment. The plan must illustrate the connection between marketing activities and programs, and the marketing objectives and business outcomes.
  3. Use the plan as a scenario analysis tool.
  4. Take the allocated budget and apply it across all the programs, activities, and tasks, indicating where there are variances. This will provide insight into whether you have any funds that can be moved to cover shortages. If you can, and all the efforts are adequately funded, then you are set. If not, you will need to determine if the objective can be accomplished by eliminating certain programs, tasks and activities. This is where the fun part begins.

If you’ve created the plan so that the line-of-sight is clear, the implications to the outcomes will become evident as you allocate funds across the different scenarios. It will also become clear whether slight or major adjustments to activities, programs, or performance targets are required. If major adjustments are needed, or should it appear that the funds are too lean–there just isn’t enough wood behind the arrow to warrant even doing the tasks–you will need to engage in a prioritization conversation.

Which outcomes are more important?

Which objectives are more important?

It may even be necessary to change a strategy or eliminate a business initiative. Or, it may just turn out that the leadership team believes that everything must be addressed and give you the money. Then of course, the onus will be on marketing to deliver, but you will have the means to be successful.


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