Video: 3 Critical Marketing Budget Mistakes

 

In my previous video, click I discussed the reasons why marketing budgets are growing. And I stressed that expanded authority does not give marketing leaders license to fly at unsafe speeds.

Before you accept broader budget authority, pharm I recommend that you anticipate these three obstacles that may obstruct your flight path:

1. Under-estimating potential turf battles. Recently, information pills the CEO of a fast growth technology company told me that she has repeatedly witnessed the growing tensions between CMOs and IT. In one of their largest accounts, their buyer, the VP of Marketing, never consulted IT before they purchased her company’s software. Eventually, the IT department got even. Prior to the launch date, they told Marketing they were blocked from installing the tool because Marketing had not performed the proper security checks.

2. Lack of clear attribution. Some companies lack clear metrics attribution, especially between Sales and Marketing. In a recent Forbes article, Dominique Hanssens, a UCLA Professor of Marketing says that “attribution can sometimes cause double accounting between the sales and marketing departments, particularly with TV ads and follow up sales.”

3. Short-term mindsets on the true value of Marketing persist. In the United States, Accounting standards prevent marketing from being added to the balance sheet as an asset. Marketing is usually treated as an expense, on the P&L sheet, even though some Marketing initiatives impact long term brand repute, revenues, and a company’s community clout.

Hanssens also reveals that most companies focus too much on flow metrics, which can include weekly sales and comparisons of revenues over time and lead conversion rates. He recommends companies also consider stock metrics in their performance management systems, such as brand repute, the value of inventory, and the quality of the customers you are attracting.

If you operate like Groupon and LivingSocial, and are chasing daily deal chasing customers, chances are you are obsessed only with flow metrics.

It’s time to create marketing budgeting models that will not only boost your credibility in the boardroom, but will also expand your value vocabulary.

Let’s face it–every seasoned pilot needs a 360 degree view of their surroundings before enjoying a smooth landing.

Did you find this video helpful? We’d like to hear from you in the comments!

Copyright 2014, Lisa Nirell. All rights reserved.

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