Yes, You Do Have the Budget
Nov 22, 2017
First, marketing is not an expense. Marketing generates sales which means revenues and profits. So stop looking at everything you do as a cost or expense, and start looking at it as the way your organization generates profitable revenue.
Second, no marketing budget is carved in stone. You can - and should be - reallocating your financial resources from under-performing activities to those activities that are achieving or surpassing projected performance goals.
In most cases, your marketing budget is producing acceptable results without 20% of your spend - and the other 80% is either breaking even or being wasted. Your success comes from your ability to identify those activities that are performing at or above projections and invest more of your budget into them so you maximize performance.
Of that 80% that is funding activities that are breaking even or losing money, you have two basic options - figure out how to improve performance so that your investment is recouped OR end the activity and re-allocate the resources associated with it to those activities that are generating an acceptable return.
Why is this simple concept so important - and ignored?
Let me answer that question with a question.
Why would you continue to waste your limited resources on something that isn't helping you achieve your goals? Sure, I understand that being optimistic is a good thing - but I suffer from being a realist and unless I am taking some action to fix an under-performing activity, I struggle with "...doing the same thing over and over again and expecting different (positive) results..."
But in business, it's all too common for people to focus on the outcomes brought about by those activities that are meeting or exceeding expectations, and turn a blind eye to those under-performing activities. And that's understandable - most people don't like focusing on "failures". But the result of that inaction is missed opportunities to really succeed.
Marketing is all about testing, learning from good, the bad and the ugly to improve performance
I teach marketing and marketing research at several colleges and one of the key lessons my students take from my courses is that they need to invest wisely. That they have a responsibility to manage resources so that the results meet or exceed specific goals and objectives.
invest limited resources so you can be more effective over time. And some times that means spending some of those resources on an activity that points out weaknesses and gaps while also providing recommendations for improving results next time.
Some organizations have the right people to do this internally. And of those, some have the time to do that work. Many lack either the expertise or the time - and of those, some bring in outside expertise so they spend X but see improvements that far surpass the dollars spent.
Others hide behind the "...we don't have the budget..." excuse. Some really believe it too...others, it's a nice excuse that gets accepted even though it's a lie.
What have you got to lose?
If you're not achieving your sales and revenue goals, something is wrong. And chances are you have a pretty good idea what it is - but you need to be sure and then have a solution you can implement.
So reallocate the budget. Get the expertise with the time to do the job and get it done now because the sooner you start improving performance, the better off you and your organization will be.
Patrick McGraw is VP of Higher Educaton Marketing Services and has more than 25 years experience in market research, competitive intelligence, business intelligence including database marketing and CRM, strategic planning, brand development and management as well as operations/campaign management. His work has consistently helped his clients and employers develop and implement more efficient ways to attract and retain profitable customers, enter new markets and launch new products. His areas of focus include the education, hospitality, travel and tourism, hi-tech, telecommunications, financial services, and retail industries on both the agency and customer sides.