In the world of marketing, January can be a tough month for Chief Marketing Officers (CMOs). They often find themselves handed a budget that doesn't quite meet their needs, leading to a year filled with compromises and disappointment. Many CMOs make resolutions to avoid this situation in the future, but these promises are often broken. To truly make a change, CMOs need to engage more effectively in the budget-setting process, and that means learning to speak the language of finance.
One way to do this is by focusing on the intersection of marketing and business outcomes. Instead of talking about brand affinity or customer engagement, which may not resonate with CFOs, CMOs should provide evidence of how marketing efforts directly impact revenue and market share. For example, brand penetration is closely tied to brand awareness, which can be measured and compared to competitors' budgets. This approach allows CMOs to make a solid case for their budget needs without relying on vague or subjective metrics.
Another important aspect of budget-setting is looking ahead and choosing the right methodology. While there are many ways to set a marketing budget, not all of them are equally effective. For example, setting the budget as a fixed percentage of last year's revenue can lead to a downward spiral if performance is disappointing. Instead, CMOs should consider setting the budget based on growth or market share objectives, which keeps everyone focused on the same goals and ensures that marketing is aspirational rather than reactive.
Finally, CMOs should ditch the traditional marketing funnel when talking to their CFO about budget. The funnel is a misapplied framework that can lead to bloated and expensive tactics that don't drive business success. Instead, CMOs should focus on more relevant metrics, such as the number of buyers and potential buyers, to make a compelling case for their budget needs.
In conclusion, CMOs can make a real change in their budget-setting process by learning to speak the language of finance, focusing on growth and market share objectives, and ditching outdated frameworks like the marketing funnel. By starting these conversations early and using persuasive language and frameworks, CMOs can give their CFOs something to work with and ensure that their marketing efforts are properly supported.
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