Reflections on Chief Marketing Officer (CMO Spend Survey)

Secure Your Share of Rising B2B Marketing Budgets

Christopher Ryan, CEO

Markets are Up

The press release announcing Gartner’s 2016-2017 Chief Marketing Officer (CMO) Spend Survey showed that marketing budgets rose for the third straight year.

• Marketing budgets increased to 12 percent of company revenue in 2016, up from 11 percent in 2015.

• Fifty-seven percent of marketing leaders surveyed expect their budgets will increase further in 2017.

• Only 14 percent of marketers say they are bracing for budget cuts, but this is up from 3 percent just two years ago.

Consider increasing your spend…

At Fusion Marketing Partners, we deal with lots of B2B companies and our experience echoes the Gartner research.

Here are some observations about why marketing spend is on the rise and why you may be in a great position to justify a larger spend as you craft your 2017 marketing budget:

Prospects and customers spend more of their time with marketing assets than sales assets.

• Studies range on the exact statistics, but most prospects do a lot of their research online, prior to engaging with a sales rep.

• If you don’t have the right resources to guide them, you lose the prospect to the competitor.

1. Marketing Assets vs. Sales Assets

2. Complete Lead-to-Revenue Strategy

Throwing more sales reps into the mix is not solving the revenue challenge.

• You need a complete lead-to-revenue strategy that covers everything from creating initial awareness to closing deals.

Marketing has accepted a wider range of responsibilities ranging from customer experience to revenue–generating systems.

• As Jake Sorofman, research vice president at Gartner stated, “Over the last several years, we’ve witnessed an expansion of the CMO mandate, from what was largely a promotional role to what is now often seen as the growth engine for the business…”

• “...In more than 30 percent of organizations, at least some aspects of sales, IT and customer experience now report into the CMO.”

3. Marketing now has more responsibilities

Smart marketing managers have learned how to prioritize spending on productive and measurable activities that tie into revenue.

• This ‘lead-to-revenue investment model’ makes the budget process more efficient and predictable.

• Read more about the top 10 sales and marketing metrics.

4. Lead-to-revenue investment model

Establishing a marketing budget

In addition to the percentage of revenue described above, there are several other methods:

• Figure out what competitors are spending & then budget to keep up, surpass or partner.

• But finding out their spend is difficult & Head-to-head comparison might not actually be useful.

Competitive Parity

• Set objectives, identify necessary tasks to achieve those objectives.

• Determine budget to complete those tasks.

Objective & Task

• Works when it’s worth spending more to get a new customer (because they produce more revenue)

• This causes higher spending (e.g. Salesforce.com spent $25.4 million to achieve its first $5.4 million in revenue).

Lifetime Value (LtV)

Prioritize Spending

• Sometimes your marketing spend is limited by the money left over after expenses.

• Or you are limited by the amount the CEO or CFO permits.

What you can afford

• Establish the revenue targets and work backwards to determine opportunities, leads and inquiries that are needed – to meet the revenue target.

• L2R is highly effective in making sure you spend the right amount on lead generation.

• L2R is not so helpful for budgeting for other expenses (e.g. personnel, PR, website, etc.).

Lead-to-Revenue (L2R)

Budgeting

Invest Early

• Regardless of the marketing budget methodology you use…start the process early.

• This ensures the right allocation.

• Marketing has a big impact on revenue.

• Helps your company invest in an area that will have many positive benefits downstream.

About Fusion Marketing Partners

Christopher Ryan, CEO

We Do This:

Brand building/messaging

Website optimization

Content creation

Lead Generation

You Get This:

Much greater levels of awareness

Higher quantities of qualified leads

Ability to generate faster revenue

Lots more information at:

http://FusionMarketingPartners.com/

http://Greatb2BMarketing.com (blog)

info@fusionmarketingpartners.com

719-357-6280