by Jim Lenskold
Most large and midsize corporations go through a major effort in their annual planning process. You know the drill – draft projections, submit, revise, revise, revise…
As long as marketing is viewed as a discretionary expense and not an investment, setting marketing budgets will remain far from efficient. Many companies use last year’s budget factored up or down by some percentage. Others budget marketing as a fixed percent of sales revenue which will never work since declining sales will mean only less marketing to help turnaround the company’s position in the market.
The question is, what can you do differently for your upcoming planning and budgeting process? Here are some points to consider for those who not only want to increase marketing ROI but also want to shift the budgeting process for future years.
Finally, recognize where the marketing organization itself contributes to the inefficiency of the budgeting process. It’s common to request more budget than is necessary, and then to ensure the excess is spent in order to protect the amount allocated in next year’s budget. Ultimately, power and prestige should not be based on the size of one’s budget but on their ability to effectively deliver the maximum return for that budget.