Ten things CMOs can do to build a business case for their budget | WARC | The Feed

Ten things CMOs can do to build a business case for their budget

With hard revenue figures, CMOs can show the short-term effects of marketing to the satisfaction of CEOs and CFOs but persuading them of the value of the long-term impact of their spending requires a different approach – one that is based on patience, trust and confidence.

Writing in the Harvard Business Review, Christine Moorman of Duke University and Jennifer Veenstra of Deloitte outline ten key actions CMOs can take, based on evidence from recent and forthcoming studies.

1. Align marketing with wider business priorities and strategies

If market leadership is sought, for example, then brand building is important, but if the business is defending itself against new market entrants then strengthening customer relationships will be more important – and the metrics tracked most closely will differ accordingly. 

2. Work closely with the CFO

It’s a good idea for marketing and finance to work together more than is currently the case. With finance becoming involved at the early stages of marketing initiatives there is scope to improve planning and decision-making, and enable agile reaction if necessary.

3. Develop a shared logic 

Explain clearly how and why marketing spend will impact various business activities and outcomes. Getting all senior decision makers – and especially the CFO – on board means buy-in from the start.

4. Measure consistently

Marketing leaders must show their impact on KPIs associated with the brand and customer relationships – and they must regularly track these measures.

5. Create a full funnel view

CFOs understand the success of marketing investments in terms of financial data, which generally comes from the bottom of the funnel. CMOs have to show that marketing delivers value in each part of the funnel: how will that be measured and how will that tie in with business strategy?

6. Build relationships in the C-suite

The case for marketing spending is best made one-on-one, rather than in monthly meetings of the senior management team. 

7. Use control groups 

The case for marketing spending is best made by demonstrating, via an experiment using a control group, what happens when there’s no spending. An ambitious approach here can guide marketing investments and build C-suite confidence.

8. Remind what marketing does for costs

Happy customers are more responsive to brand marketing and sales efforts and more likely to share positive word of mouth. That means an average 3% savings in future expenditures. 

9. Close the metrics gap

Marketing leaders need up-to-date knowledge to drive conversations about budgets. Ensure that all metrics are collected regularly, not just those pertaining to sales and digital performance. 

10. Make the investment case

All of the above can help CMOs educate senior non-marketing colleagues as to why marketing should be regarded as an investment not a cost.

Sourced from Harvard Business Review