Budgets are a way of life for us all, controlling costs is essential to the success of any business. To grow requires finance, and budget increases for front line functions like sales, operations or marketing are a solid investment in your business. Experience helps you to prioritise your spend, ensuring your business capacity is balanced to handle a full order book without compromising the customer experience.
However, many B2B companies still view marketing as a back-office cost centre and so its budget is allocated based only on an incremental increase or decrease from the previous year. This is a sure sign that the marketing function is not delivering value for the business. In some companies, spend on marketing is even less strategic, more of a knee-jerk reaction to promote those products or services that are selling well at that moment. Or worse, marketing is spending money to copy competitors’ marketing ideas.
Calculating return on investment for marketing activities is notoriously difficult, even for online marketing where data is more readily available. With such a vague value proposition, it is easy to understand then why many businesses do not know how to allocate marketing budgets.
Below are 5 guidelines to help marketing managers show real results by maximising value for their marketing spend:
If its not in your business strategy it shouldn’t be in your marketing plan
When the marketing team is not strategic, budgets are often misdirected and wasted. Money can easily be squandered on advertising, creating unnecessary collateral and overspending on events or tradeshows that will have little return on investment.
Your company’s business strategy should be a carefully planned roadmap, designed to ensure that your competitive advantage sets you up for future success. It will envision and define what your company will do and what it will not do, into which industry segments and geographies it will grow and what tactics and resources will be employed to achieve success.
It should go without saying therefore that your marketing strategy and budget needs to be developed hand-in-glove with your business strategy, then executed with laser-focus alongside the sales team. Raising your marketing team’s profile and aligning objectives with business growth will also create a more motivated and productive group. Initiatives developed with the sales team will also make their job easier to open doors, thereby increasing confidence and improving the overall lead conversion rates.
Maintaining concentration on your marketing plan is essential to avoid wasting resources. Knee-jerk reactions to competitors marketing activities and a focus on short-term initiatives usually have a limited shelf-life. It is far better to take a longer-term approach in order to build and sustain brand authority
Don’t spend all your marketing budget trying to acquire new customers
Did I really say that? Yes, many B2B marketers are obsessed with new customer acquisition, however according to research by Forrester, only 0.75 percent of new leads generated become closed revenue.
It would be a wasted opportunity to overlook your current customer base and spend most of your marketing budget on new lead generation. Your existing customers should be more receptive to using your new technologies or increasing your scope of supply, and by doing so they are providing an effective endorsement to others in your industry. These case studies can provide testimonials which may be decisive for convincing new customers.
Audit your customer accounts to identify where you are missing prospects to up-sell, cross-sell or increase utilisation of your products and services. Develop marketing tactics that will reach your buyer personas by listening to your customers, understand their challenges, issues and specific needs. Recognise the role of influencers, decision-makers and end-users, some of whom may be outside the purchasing customers organisation. Engage with your sales team to profile customers and ensure that your marketing strategies will give them the horsepower to improve their sales effectiveness.
Targeting marketing at your existing customers will help to enhance the quality of their experience with your company, they will become advocates of your business which in turn will have a strong influence on their peers. This is likely to be a more effective strategy for increasing revenue than a blind devotion to generating new leads.
Spend as much as you can afford on your website
All too often company websites are instantly forgettable. Customers will have little interest in looking around if the value proposition is not clear or relevant to them, and information is not useful or intuitive to find. Why is this important? These days most customers research online early in the procurement process and may only engage with your people closer to the decision stage.
It’s hard to understand why so many companies assign such small budgets to the design and maintenance of their website. After all, this is potentially your busiest and best salesperson, and you know how expensive they can be! The website pitches to your customers worldwide, simultaneously 24-7, it never sleeps or takes a day off and maintains a relentless focus.
Whatever the cost, the value it can provide is obvious.
For a company website, less is usually more – it doesn’t need to be a library. Cluttering it with obsolete or low-value content will just create frustration for the visitor. Audit, rationalise and streamline, avoiding rambling and ‘wordy’ pages. Grab your customers’ attention instantly by showcasing how your value proposition addresses their challenges, highlighting proof points such as case studies and customer testimonials.
Reviewing the site analytics routinely will show who is using your site and what pages are popular. This knowledge will guide the sales tactics and feed back into your marketing strategy, helping to pinpoint where content needs to be improved or better promoted.
Create great content cost effectively with your in-house experts
In tight races to win contracts, the direct involvement of the Subject Matter Expert (SME) can be the decisive factor in closing the sale. Their knowledge, experience and confidence can reassure the customer of your capabilities and convince them that your company is the best choice. Therefore, it makes sense to incorporate these personalities upfront in the marketing efforts which gives them exposure to all potential customers.
Short ‘talking-head’ videos by your SMEs are simple to produce and can be very effective for communicating key messages on websites or presentations. A blog on your website will create a source for your experts’ thought leadership ideas and provide you with content for your company’s social media feeds. Expert webinars can address key customer issues or industry challenges, while expanding your reach and building your brand’s influence.
The problem for marketers is usually to gain cooperation of the SMEs and then utilise them to best effect. They may spend a lot of time away from the office and some may not be the best communicators. However, this can be overcome by using creative resources to work alongside the SME, writing copy and designing content on their behalf.
It may also be valuable to recycle and re-purpose strong technical content that is already available, for example case studies, conference papers, presentation slides, etc.
PR is cheaper and has more value than advertising
Paid advertising is expensive. Creating noticeable content takes time and resources, and the costs for publishing add-up quickly as the advertisement must be repeated several times to be memorable.
A 2014 study by Nielsen, commissioned by inPowered, concluded that public relations is almost 90% more effective than advertising. PR involves influencing editors or reporters to create positive stories or articles about your company – this content will be perceived by your customers as more credible or significant than paid advertising. The downside is that PR takes more effort, it has to be earned instead of paid for.
Building strong relationships with the relevant press personnel is essential so they can be guided to represent your business accurately. More consideration may be given if you clearly show how your value proposition differentiates and is relevant for key issues in your industry.
PR is not just to showcase your latest product or service offering, there may be many PR opportunities relevant for your business. It can be valuable to demonstrate your expertise through SME interviews and published technical papers for example. It can also be used to highlight your participation at trade-shows, new facility openings or to promote your community activities.
A lack of understanding of marketing value doesn’t mean you should just follow the same formula of budget spend year after year. By working closely with sales teams and business managers, the marketing strategy can be aligned to the overall corporate objectives. By careful planning and utilising available resources, effective marketing tactics and tools can be developed to maximise the bang for your buck.
What are your experiences with managing marketing budgets or demonstrating marketing ROI?
I help companies drive growth, strengthen performance and improve productivity. I am a business management consultant and mentor focused on delivering exceptional results.