Surprisingly; you might want to begin from the middle!
How much should you spend on marketing in 2019? What strategies and tactics will get results? What traps should you avoid? Jonathan Kaftzan, VP Marketing from Deep Instinct, weighed in on these hard-hitting questions during a recent Penguin Strategies meetup at Google’s Startup offices in Tel Aviv. During this session, he offered some surprising insights. Here’s why the audience was riveted and ready for more:
‘Meet-me-in-the-middle’ takes a fresh and more fluid approach to market budgeting, from top-down to bottom-up. Top-down accounts for the company strategy, from the CEO’s perspective and budget guidelines laid out by the finance department, which are usually metrics driven. Bottom-up reviews what really generated success last year and delivered the best ROI, and what didn’t.
The question is; how do you balance between the two? In this context, the balance of power over budgeting often plays out between the board, who may have earmarked a specific event, the product marketers, who may vie for a bigger launch budget, and the sales team, who are always keen to secure a larger budget.
A fresh take on marketing ROI
When reviewing last year’s marketing activity, it may be worthwhile truly defining who is a contact. Equally important is to understand how many relevant leads were created per marketing activity, whether it was a webinar or end-of-year event. The logical next step is to assess how many emerged as MQLS, SALs (Sales Accepted Leads) and Opportunities and how many turned out to be bottom-of-the-barrel leads? Most importantly is the need to calculate the total opportunities divided by market spend to figure out the ROI.
Watch: Kaftzan on the best practices for measuring ROI for lead generation
What will it take to move the needle?
For next year, you may want to take a hard look at what will be your marketing department’s big budget anchors? Which of your high-spend items will help you create those memorable ‘Neil Armstrong Moments’, and what can you do to ensure your budget for high spend items as efficiently as possible, while maximizing potential results? At the end of the day, being a successful marketer isn’t necessarily about how much you spend — it’s about what you do with the budget allocated to you.
Be where your customers are
When choosing an event to attend or sponsor, it’s important to realize whether a potential customer is attending for learning or for purchasing purposes? Of course, other key parameters including the stage in the company’s lifecycle. The buying persona and industry can vary, depending on the needs of each company.
One of the best examples cited was the dilemma of choosing between the top annual global cybersecurity event of the year; RSA, which generated only two opportunities for Deep Instinct, vs. the focused yet expensive roundtable events, which tended to pull in POCs, even though the volume of leads were phenomenally less.
Create an annual budget but plan 2 quarters ahead
In the IT industry in particular, budgeting agility is the name of the game: Although we can’t run away from the annual budget plan, a highly detailed plan of what your department wants to achieve in the next two quarters, may be a more realistic way to work out a budget.
In a disruptive industry, there is no point allocating a budget at the beginning of the year for end of year activities when the expected unexpected can sway the company and the budget in a totally new direction.
Budgeting for an A-Team locally and globally
Leveling up with the right team for the right activity within the right time zone is key. For instance, lead generation can work well when the inside sales rep, often referred to as the SDR (Sales Development Rep), is positioned within the marketing department.
When ensconced in sales, the SDR is often unrealistically expected to generate bottom of the funnel, POC-ready leads, even following a whitepaper download.
In the cybersecurity industry, in particular, where the buyer personas are already immune to calls, this position under sales is doomed. The ideal marketing A-team therefore would comprise of the SDR, an awareness driven Marcom, product marketing and marketing operations.
KPIs and more to consider ahead
In the IT industry, quarterly reviews are essential, especially for finance, as they need to plan and review monetary liquidity throughout the year. On a micro level, it’s a good idea to review each budget item and consider its impact on marketing results. But one of the most important KPIs to compare would be the actual vs. planned budget spend per item.
So, what will be your Neil Armstrong moment? How do you intend to track your budget success?
by Perry Nalevka on December 31, 2018
CEO of Penguin Strategies