If there is a moment just before panic, we’re in it. The wisps of a recession have aggregated into full storm clouds just above the horizon. CFOs are reaching for their hatchets as sales pipelines continue to soften. Roughly half of the CMOs in our five October huddles reported that their 2023 budgets had already been frozen or cut to some degree. So yeah, it’s gloomy out there.
And yet, courageous CMOs forge on with steadfast optimism. After all, they’re the ones who have always made more out of less. The ones who parlay customer insights into compelling narratives. The ones who count on ingenuity to overcome resource limitations. The ones that know that 2023 will prove exactly how important marketing really is to organizational success. And the ones who kindly share budget-stretching tips to help their peers succeed along with them.
Have a Predictive Marketing-to-Revenue Model
What’s the best way to protect your budget? Have a predictive marketing-to-revenue model that shows how X dollars spent will deliver somewhere near 5X in revenue. Notice we didn’t say pipeline or sales-qualified opportunities. While those numbers are helpful to get to revenue projections, those aren’t the metrics that matter to your CEO, CFO, and board of directors. The bottom line is always the bottom line with these folks.
If you don’t have a predictive marketing-to-revenue model in place, make it a top priority ASAP. It takes roughly 6-18 months to test and refine the model, so work with your marketing ops and sales teams to get started. (And if you need guidance on this, let us know!)
Prove you’re Underfunded
The best defense is always a good offense. In this case, if you want to keep your budget from being cut, make the argument that marketing is already underfunded relative to your major competitors or industry. The average marketing spend-to-revenue ratio for over 2000 companies (68% are B2B) in the latest CMO Survey is 8.69%. No doubt that that ratio is higher (10-15%) if you are in high-growth mode. And if that doesn’t work, orchestrate a spending test either by channel or target segment that will make the case for more budget if successful.
Acknowledge Aggressive Growth Goals
Despite the economic uncertainty, several Huddlers work for companies that have set aggressive growth goals for 2023. One Huddler noted they were targeting 60% growth while another mentioned a 40% growth target. With ambitions like these, marketers have no choice but to ask for additional funding, not just to fill the pipeline but also to develop the content that will nurture the leads and enable sales to close. As much as you’d like to be a miracle maker, avoid committing to the impossible.
When the going gets tough, the tough get together. One CMO shared in a huddle how they brought together 20 non-competitive firms at a giant tradeshow to dramatically increase their collective presence. They even co-funded a massive party with a big-name band that would have been impossible for any of the individual companies to do separately. The result? More high-quality leads. More deals accelerated. More internal interest in partnerships.
If there’s no partnership experience (PX) function in your organization yet, figure out who could play that role or hire someone. For more insights on how to leverage partnerships, take a listen to the Renegade Marketers Unite episode featuring Denise Vu Broady, Michael Welts, and Melissa Sargeant.
In-person events came back with a fury in the 2nd half of 2022 but not all CMOs are praising the results. The excitement of being together in person again has been tempered by the reality of significant cost increases (2x) for exhibiting, travel, and entertainment. Looking ahead, many CMOs are holding off on booking exhibits at unproven events and instead just sending a few salespeople to “work” the show. Others are hosting lunches or dinners with customers and prospects near the event venue. And finally, when a certain tradeshow merits a booth, some courageous CMOs are taking the “go big or stay home” approach including irresistible swag!
Even if your budget does get cut, try to reserve some of your remaining funds for testing. An experiment can turn into a key strategic initiative (just ask Diana O’Brien, the CMO behind the development of Deloitte University). Among the things CMOs are testing right now: highly targeted syndicated content, leveraging 3rd party intent data, permission-based direct mail via a service called PostGrid or birthday cake-flavored coffees directly from Golden Ratio.
Before embarking on any marketing experiments, make sure you review the success metrics with your CFO. You need their acknowledgement that if the test is successful, you’ll be able to put more dollars against it.
Have any budget tips and tricks to share? Let us know!