How to Sell Online Marketing Programs and Budgets to Corporate Chiefs
Whether it is labor, operations or marketing, the first sell of any budget for these business sectors or departments is the company’s big chiefs: CEO, CIO and/or CFO. The challenge for the chief marketing officer (CMO) when developing and presenting any marketing program and budget, including the online portion, is to convince the big chiefs that marketing is an investment, rather than an expenditure, that is returned in the form of increased revenue. There are a number of strategies and initiatives that the CMO can take to change the boss’ mindset.
1. Presenting Optional Budgets.
A CMO is more likely to receive approval of his or her preferred online marketing budget if the CEO is provided with contrasting budgets to compare their revenue-generating power. The first should always respond to the CEO’s instructions, while the second (or even third) shows how much more ROI is possible with a larger, or different, investment.
2. Identifying the Revenue Sequence.
Pinpointing the exact effect of an online marketing budget, in terms of ROI, is no easier than any traditional media. There are plenty of metrics about what happened, but none will predict what will specifically happen in advance of implementing the program and spending the money. What a CMO can do is identify the company’s revenue sequence and the progress of prospects through that sequence. This will also help the CMO to identify specific online marketing opportunities that are tied to prospects’ movement.
A company should be able to establish reliable metrics for most stages of its sales, or revenue, sequence: What percentage of prospects was converted to paying customers during which stages. That data become benchmarks for both the sales team and the CMO. As each stage is identified, it is also important to recognize the drivers, or reasons, that propel prospects from one stage to the next.
Such an exercise creates a “big picture” view for the CMO of the revenue sequence so he or she can determine where active marketing efforts will have the most impact on increasing sales at those stages. Now, the CMO has the kind of numbers to justify an alternative online marketing budget that costs more but generates larger revenue numbers which is the ultimate goal of the big chiefs and the yardstick by which they approve budgets. When the CMO can prepare and present marketing budgets with this process and then deliver the projected revenue numbers, he or she has solidified his or her position in the company and is able to operate the department with more autonomy and control.
3. Creating a Better Model of Online Marketing Operations.
Another component of successfully selling an online marketing budget to the CEO et al is to reinvent the online marketing department. This is necessary so the company can be more competitive in that effort and affect the revenue stream as the CMO predicted (promised) during the budget presentation.
Too many companies have made the commitment to interactive media but haven’t sufficiently staffed the effort. More importantly, they are still too channel-centric instead of customer-centric, which is the essential advantage that interactive media promises. In a December 2010 Forrester Research survey of U.S. interactive marketing executives, 30 percent of the respondents (companies with more than $500 million in revenue) stated their interactive marketing departments had fewer than 15 staff members. The survey also found that only 20 percent of larger companies had more than 100 employees in online marketing.
Many companies find the best solution to be utilizing outside online marketing experts whose sole focus is on online marketing. Wakefly offers many of these solutions. Check out our website to find out more.
Gaining approval for an online marketing budget from the executive staff involves more than just the numbers, data and dollars. It’s also developing a sufficiently staffed and well-trained online marketing department that is able to convert more of the custom content and customer interactions into the revenue projected in the CMO’s budget.