As budgeting season approaches, we huddle around projector screens and decide how to best allocate the overall expenditure budget. We try to determine which expenses are likely to have the biggest impact on growing the top and bottom lines.
After more than 15 years in the industrial world, I've learned one certainty: marketing budgets are the most unloved of all budgets at most industrial companies. It also raises two crucial questions:
- Why is marketing the first budget line to get axed when the overall numbers don’t jive?
- Is doing more with less really the path to success?
There are five good reasons why maintaining a smart and healthy marketing budget could be the most important thing you do to ensure the future of your business.
1. Invest in a downturn. Reap the benefits later.
This is a marketing fundamental, which many of us forget as the ever-expanding pressure on short-term results takes our eyes off long-term growth goals.
The best time to invest in marketing is during a recession or at the beginning of a recovery. Every industry, and the business world in general, experiences cycles. During the downward cycles, most businesses hunker down and tighten their spending as they await better times. When the upswing finally arrives, everyone rushes in at the same time to beat the drum for new business.
If you have carefully crafted the right strategy and invested in the right marketing efforts during the “hibernation” phase, you will come out of the gate in a recovery ahead of others who are scrambling to restart and understand how to take advantage of the once-again growing marketplace.
2. Understand your markets.
Look at the word "marketing" closely. The key part is market. One of the most important roles marketing plays in any organization, whether in a B2B or B2C, is helping the overall enterprise have a better understanding of its markets. It's marketing's job to carefully sift through the wheat and the chaff to be sure the right markets and segments are clearly identified and thoroughly researched. When this is done, marketing dollars can be spent more effectively to yield a higher return.
Never forget to constantly re-assess your markets, challenge your assumptions and look for new segments to explore.
3. Everyone is a consumer.
The old adage that B2B and B2C are two completely different worlds is slowly shifting. We now realize that decision makers in a business environment are, after all, consumers like any other. Understanding how a decision maker in a manufacturing business chooses its key suppliers can take some lessons from looking at the purchasing decisions that same individual may make in buying his or her car or favorite beverage.
Consumers today are changing the way they purchase, doing much more research – often online before turning to a potential supplier. How is your business positioned to clearly and easily answer the questions of business consumers?
4. Social what?
All of us are now constantly bombarded on all fronts with opportunities to interact with companies and brands. The amount of clutter this generates means that today's smart marketers must understand which channels are effective to reach decision makers and which are a waste of time and money.
The rise of social media as a whole cannot be ignored by companies in the B2B world. But where does one start?
It's best to work with people who have a proven track record of understanding your markets, constraints, decision points and specific needs. Only once these have been fully fleshed out can you begin work on an effective social media strategy. The right counsel in this area can help you focus your marketing spend and avoid wasting precious time and dollars on ineffective practices.
5. Rethink marketing.
In a recent survey of Chief B2B Marketing Officers by Forrester Research/BMA (“B2B CMOs Must Evolve or Move On,” by Laura Ramos, July 3, 2013), 85% reported that marketing today does things no one thought would be a marketing responsibility only three or four years ago. What does that mean in practical terms? Marketing should not be seen as a single department that needs to interact with others, but as a mindset that should permeate the entire company.
"Content marketing? Social Media? It can come from all four corners of the organization. Everyone is a potential brand ambassador who can impact company image and sales, from your sales reps to the truckers, the service people and even the person who answers your phones at the front desk. All need to understand your business and how they handle their individual jobs can help or hurt the bottom line. Marketing people are increasingly becoming conductors and coordinators who extract the best from the entire organization, working across functions."
When it comes to developing a marketing budget for 2014, C-level executives must consider the ever-evolving definition of marketing so the company can develop the right strategies before jumping into the tactics. But most importantly, it will help you gain a clear understanding that today’s successful B2B companies realize that they are, first and foremost, marketing companies, regardless of the complexity of the products and services they provide.
It’s not a question of whether or not you should have a marketing budget or how much to spend. It's making sure that the entire company has thought about the myriad aspects of today’s marketing requirements and provided adequately to resource it. It may be the most important thing you do all year.
Jerome Barrillon is executive director at Keiler (www.keiler.com), a marketing and advertising agency in Farmington, Conn. Barrillon’s experience includes serving as Director of Marketing, and Vice President/General Manager for Ahlstrom (paper and nonwovens divisions), and Director of Strategic Development for Illinois Tool Works (ITW).