Tips for creating and presenting your budget
If your firm is blessed with an ever-flowing supply of cash, then maybe you don’t need to worry too much about your marketing budget. For the other 90%, it’s essentially a continuous game of tug of war between idealism and reality. When it comes to the approval process, it takes more than a quick spiel and a handout to win over your Partners and finance team. A comprehensive strategy and thorough detailing of costs and returns is vital to gaining support and securing funds for you and your team.
According to general rule of thumb, the marketing budget will comprise 3-5% of the company’s overall revenue. But the fact of the matter is that many of us are functioning off a lot less than that, and for many, much less. So how do you confront your Partners when you need more money for that banner campaign, or you really need to hire a full-time Coordinator? Here are some tips that may help you approach your budget with a little more confidence and strategy.
Strive to have a clean, no questions asked kind of budget. A Partner should be able to look at your budget at any moment and know exactly where money is allocated and exactly how much. Avoid ominous phrasing or shifty categories that could cause uncertainty. For new managers, or for those who have inherited an untrusted budget, this transparency becomes your jetpack to gaining trust and rapport. Having a roadmap of the department’s spending is the first step to helping others see value and measurable results.
Know the audience
Accountants like facts, numbers and graphical representation of dollars. They like to know what value goes in, and precisely what value comes out. This means you should track your data over the year and calculate return on investments (ROI) wherever possible. If you know that your new website costs “x” and your online inquiries went up by “y” percent and resulted in “z” number of client wins, then that’s a victory worth presenting. However, keep the fluff to a minimum, stick to facts and points and never gloat.
Set your boundaries
We’ve all heard “I didn’t know what to call it, so I put it under the marketing budget.” Marketing has a tendency to become a catchall pit of miscellaneous expenses that eventually eat into your cash vault. It also becomes the role of marketing (often unknowingly) to cover Partner sponsorships, golf tournaments and other unilaterally allocated costs. Surprises like these can be detrimental to the budget if you a) have no control the event, and b) didn’t even know it happened. To counter this issue, talk to your Controller about setting up a second GL code for Partner sponsorships and networking events. Anything that you are not directly in control of or sign off on should be put into a separate silo of expenses.
Spread the love
It’s certainly no secret that particular niches generate more value or require more attention than others. Not all niches are created equal — however, when it comes to the marketing budget, make sure that every niche is given some love. Make sure that your budget explicitly addresses each niche and clearly shows where the money is going. Aside from the niches, also show that you have a solid range of marketing tactics: publications, event sponsorship, speaking engagements, etc. Distribute your funds across a spectrum of outlets so you know what’s working and what’s not. It will also help to show that you are not putting all your eggs in one basket.
Trim the fat
Don’t be scared to reevaluate vendors or contracts that may be losing their spunk. It’s often hard to sever ties with the folks that have treated you well over the years, but the moment you start to question their quality or worth, it’s time to start shopping elsewhere. If they’re not going above and beyond for your business, you are guaranteed to find someone who is. Also do an inventory of your current publication contracts to determine where you’re getting the most bang for your buck. Maybe the content for a certain publication is no longer bringing in value, or you’re noticing that digital advertising is working much better than print in certain regions. Stay on top of the numbers and always ask yourself what options will bring the greatest ROI.
Just because your competition is doing it, doesn’t mean you should. Don’t present what is working for your competitors, present what works for your clients and your audience. Certain strategies or marketing outlets might work wonders for other firms, but in the end, your firm is unique and you need to tailor your strategy to target your specific client pool. Try advertising in places that your competition is quiet or unrepresented, you may uncover a goldmine of new prospects.
Match your budget to your strategy
Your strategy should mirror the goal and strategy of the firm, and your budget should aim to support that strategy. If something on your budget doesn’t support the overall goals or message of the firm, then it shouldn’t be in your budget. Be confident in saying no to events or sponsorships that are not directly in line with this ideal.
Budget for risks
Nowadays, you have to be innovative if you want to grow. Innovation usually involves taking some risks, so be sure to budget in funds for dabbling in new territory. Be pathfinders and target areas that are new or untraveled. In order to make wise decisions, you need to take some risks and figure out what works for your firm.
Presenting your budget is just like any other presentation — you need to be prepared. Know your speaking points, be able to point to supporting statistics, anticipate any questions and have responses prepared for possible areas of concern. Know what kinds of campaigns are working for your budget and what’s not. If you are unsure about your numbers, be sure before going into your presentation. Remember, these are people who live and breathe numbers. Think like an auditor and ensure all your ducks are in a row before walking into the meeting. It’s also a great idea to practice with someone familiar with the financial industry —like a fellow AAM member!
Budgeting, like most things in business, is a balancing act. It’s a matter of finding the perfect blend of facts and projections, innovation and tradition, risk and comfort. Prepare for the worst, strive for the best, and be confident in whatever comes your way.