ME: “How much of your budget is committed?” THEM: “100%” (100% of the time…)

From time to time as a marketing leader, you need to make adjustments to your budget. Sometimes you are dealt a budget cut that you need to absorb, other times you just want to fund an additional campaign and you need to “make room” somewhere in your budget.

“I can’t possibly make room in my budget”

How do you find that space in your budget? You typically start by reaching out to the budget owners on your team and asking: “How much of your budget is committed in Q3?” After all these years, you’d think I would have learned, but the answer is always the same: “100%!”

They actually don’t know the answer

For years, I assumed that these marketing managers were being deceptive. How could they possibly have 100% of their budget committed every time I asked them? Then I had an epiphany: they didn’t know the answer. They weren’t hiding budget from me the status of their budget was hidden from them. Their spreadsheets weren’t good at tracking the detail behind the numbers, so they could not give me an accurate answer.

Lots of hidden pockets in your budget

Consider these examples:

• Your UK marketing manager is planning a customer conference as part of the strategic focus on customer engagement. They have a budget for $25,000 for that event and the event manager developed a plan in line with that budget. As far as the UK marketing manager is concerned, that $25,000 is fully committed. What she might not know is that $8,000 of the budget is reserved to hire an outside speaker for the event, but the speaker hasn’t even been identified. If our marketing manager knew that detail, she might recruit a speaker for free and release that budget to fund a project for the CMO.
• Your events manager has a monthly budget of $5,000 for trade show giveaway items and he hasn’t spent any of it for the last two months because he has a plentiful supply of swag. As the end of the quarter approaches, he might decide to stock up on those fancy hoodies, or just decide to under-spend on that line item. What if you could re-allocate that $10,000 and put it to work on a new initiative?

Visibility and agility were key motivations to build Planful

This lack of visibility, which creates a lack of agility, was a key motivation for me to build Planful. You will see in our marketing performance dashboard charts that we clearly illustrate the level of commitment of your budget over time, highlighting the areas of your budget where you have the power to make changes.

 

 

Give yourself a budget increase

During my career as a CMO, I had a CEO who would famously turn around any requests for additional budget. If we came to him with a request to fund a great new initiative, his response was always the same: “If you think it is so important, simply cancel the least important elements of your plan.”

It was kind of annoying, but he wasn’t wrong. If I’d had the ability to see those pockets of available money in my budget, I might have funded some more innovative programs, even if it meant that we didn’t buy those cool new hoodies.