As marketing technology continues to explode (see ChiefMartec’s supergraphic), the expectations of the marketing department continue to rise. Coupled with increasing competition, and increasing expectations from public and private funding, getting the budget you need is a challenge. Companies are tightening their belts and marketing is often one of the first places the finance department looks to make cuts.
So in this era, how do you get budget approval for the martech that you need? Or even more pressing, how do you not lose your current marketing budget?
While I’ve admittedly set a dark scene, there is hope. With the right tools, there is a solution.
Let’s say that you are using a free tool, but are dissatisfied. The free tool doesn’t offer the granularity that you want and you don’t fully trust its accuracy. It’s free, after all. You’ve done some research and have found a better alternative that costs $100 per month. So you go to your boss and ask for the budget to purchase the product. The reasoning behind your ask is that it will make your job easier and will make your output more effective. While these of course are good things, you are likely to get a ‘no’ or at least significant push back.
Why is that?
“Making your job easier” or “making your output more effective” are qualitative reasons, which means it is practically impossible to compare against $100 per month. What do those reasons really mean quantitatively?
So you go back and figure out how much easier your job will be and how much more effective your output will be. With numbers attached.
Let’s say that you calculate that the tool will save you two hours per week or 8 hours per month. You also think that it can get your marketing output seen by 10% more people. That should be enough for your boss, right? Nope, you get turned down again.
That’s because you’re still not talking in the language that your boss wants to hear: revenue. How much revenue is 8 hours worth? How much revenue is 1,000 clicks or page views? These don’t have monetary value. Sure, you could calculate how much 8 hours is worth based on your salary, but if you’re anything like me, some hours are a lot more valuable than others.
The only way to get budget approval is to be able to demonstrate positive ROI. Prove that the martech will lead to more incremental revenue than the incremental cost. If you can translate “making your job easier” and “making your output more effective” into $150 in incremental revenue per month, your boss is much more likely to give you the budget.
The same thing goes with not losing your existing marketing budget. Let’s say that your team spends $30,000 on paid media every month. Your company wants to tighten its belt and find ways to reduce costs. How do you make sure that your $30,000 per month is safe?
Saying that your $30,000 drives X leads isn’t enough. What’s the lead quality? X opportunities is getting closer. Being able to say exactly how much pipeline your $30,000 generated may be enough, assuming your pipeline multiplied by your expected win rate produces positive ROI.
But what would really keep your budget safe is being able to definitively say how much actual revenue was generated. True ROI.
The question of getting new budget and keeping existing budget comes down to the same thing. You need to be able to prove that the revenue generated is greater than the cost. Even if you’re in a fast-growing company where revenue may be expected to be exceeded by costs, you need to be able to show that you’re at least driving growth.
Here is where it gets tricky. How do you show that revenue generated had to do with the new tool or came from the budget that is in question? How do you connect specific marketing efforts to revenue? Full-funnel, multi-touch attribution.
Attribution connects marketing data to sales data and credits marketing activities with the amount of revenue credit that it impacted. An advanced attribution solution will use a weighted model to give the appropriate amount of credit to the specific marketing efforts that drove prospects through the key stages of the funnel. That way, you can say the exact amount of revenue that was generated from the blog, or by a specific marketing channel, or by a specific campaign, etc.
Going back to the opening scenario, with an attribution solution, you can go to your boss and say that with an extra 8 hours, you could produce one more blog post per month that will generate $200 per month. Positive ROI.
Furthermore, a couple months down the road, you could go back into your attribution data and see exactly how the blog post is performing. You can see how many leads it drove, how many opportunities it drove, how much pipeline it drove, and depending on the length of your marketing and sales cycle, how much revenue it drove.
And if you’re focusing on an ABM strategy, you can see how much engagement it drove with target contacts and accounts, how it has contributed to their predictive account engagement score, and ultimately, its contribution to closed-won accounts. Again, you can prove its impact on revenue.
First, you were able to base your request on actual data. And second, you were able to monitor and measure the actual results with actual data. This allows you to continue to make smart decisions. Maybe the tool didn’t pan out as expected. At least you’re able to know with data-backed certainty. With attribution and the promise of accurate measurability, companies are much more willing to take a chance on a test or trial run.
Earlier this year, we tested a direct mail ABM initiative. We spent several thousand dollars trying to engage dozens of target accounts. As it was our first direct mail campaign, we didn’t really know what to expect. But because we are able to measure the success of this mailer via attribution the exact same way we are able to measure digital ads, we were confident that we would be able to see the data and make a smart decision going forward. If it was successful at driving demos and customers, direct mail could become a huge component of our ABM strategy. If it wasn’t successful, we would know and be able to cut our losses. You can read more about our CMO box here.
Attribution allowed us to get the small amount of budget for this new initiative. And it’s allowed us to get even more budget approval to continue initiatives like this.
So how do you keep your marketing budget and get approval for even more? By speaking the language of your boss and executives. Prove the monetary returns in a way that they trust with marketing attribution.