How to Negotiate a Bigger Marketing Budget

I’ve been talking to a lot of marketers lately, and they all seem to have one thing in common – they could really use a bigger marketing budget. And yet while most marketers agree they’re strapped for funds, there seems to be this resignation that it is what it is, and there’s really nothing they can do about it.

While there certainly are limits to your company’s willingness to spend on marketing, I’d argue that most marketers simply accept whatever number comes out of the voodoo Excel magic your CFO is doing instead of proactively constructing a plan to demonstrate what you can do with different dollar amounts. Here’s how you can change that.

I first learned about this technique a few years ago when I was putting together a proposal for a potential consulting client. I was reading The Consulting Bible by Alan Weiss around the same time, and in the book he talks about how the most common pushback you encounter from potential clients is, “Wow, this is great, but we weren’t prepared to spend this much. Can you come down by x%”. Depending on your personality, your natural reaction may be to simply reduce your price to get the contract, or hold firm and hope they sign anyway.

Instead, Weiss suggests submitting a proposal with 3 options. Option A is the small project, small budget option. Option B is larger scope, larger budget, and Option C is the biggest scope, biggest budget. In this scenario, after seeing your proposal, the prospect may say something like, “We really want to tackle Option B, but our budget is more in line with Option A. Can you come down at all?” To which you respond, “No problem. Let’s start with Option A, and then once we get through the first phase, you can decide if you want to continue working with me to achieve the extra deliverables in Option B.” Almost everyone will bite and sign the contract (whether Option A or Option B).

The key here is you’re giving people three ways to say YES instead of equal options of saying yes or no. You’re also matching budget to deliverable so it’s clear what they get for the money.

You can use the same method can be used to negotiate a bigger marketing budget at your company. Most marketers are handed a budget number and expected to make it work regardless of lead/opportunity targets, but that’s like setting a price without knowing what you’re going to get in return – makes no sense! If you treat your budget as a fixed cost, you’ll end up signing up for targets that you can’t possibly achieve, that you KNOW won’t work out, and yet you’re telling the CEO and VP of Sales that you can.

Guess who’s getting blamed when you don’t hit the target?

Instead, before you’re given this mythical budget number, take charge and demonstrate what you can do for different dollar amounts by following these simple steps:

  1. Get involved in the planning process early. In reality, there’s no voodoo magic happening to determine your budget – you’re just not part of the conversation. To earn a bigger marketing budget, you need to insert yourself into the planning process and demonstrate the value you can deliver with the right funds. Understand the revenue scenarios at play – what are the conservative, moderate, and aggressive plans for the company, and craft marketing plans to support each one.
  1. Demonstrate your ability to get more efficient. This is a big one. It’s hard for a CEO to swallow spending $500k more in marketing, but if you’re showing that you’re actually becoming more efficient (include how you’re doing this) on a cost/lead and cost/opportunity basis, it becomes a much easier conversation.
  1. Make sales your ally. Sales has a big incentive to get as much as they can from marketing. When you’re coming up with the marketing plan, sales should be in lock step from day 1. Make sure you’re on the same page with regard to goals, how you’ll get there, and who owns what so you can go to the CEO and present a united front. If sales is arguing that they really need more from marketing and you’ve presented a plan on how you can do more, the CEO/CFO is much more likely to get on board.
  1. Deliver what you say you’re going to deliver. The biggest factor in earning a bigger budget is trust that you’ll use those funds wisely. You earn trust by doing what you say you’re going to do consistently over time. No more signing up for targets you don’t believe in. Instead, create a plan you really think you can achieve, and hit your targets month over month, quarter over quarter.

Okay folks, that’s all I’ve got. What did I miss? How do you fight for the marketing budget you need to support the sales pipeline? And if you struggle with revenue planning and are looking to reclaim your sanity with a better approach, sign up for the Sponge beta!

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