Can you imagine having an unlimited marketing budget? It would be impossible to fail, and you could finally do everything you and your team have ever dreamed about.
Sadly, that’s not likely to happen. Most marketing leaders fight tooth and nail to scrape together every extra dollar available for their marketing budgets.
Sound familiar? No matter how big or small your budget is, what matters is how you spend it. So how can you earn the highest ROI and maximum impact with every dollar you invest in marketing?
More money, more problems
There are a few common problems that every marketing leader faces when it comes to managing their budget. Even if your budget isn’t massive, you’ve probably encountered one or more of these challenges. Here are some of the common problems with your marketing budget.
You’re wasting most of it
John Wanamaker famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
I think that’s an understatement. Most of your marketing dollars are being wasted, whether you realize it or not. In marketing, some degree of waste is inevitable. After all, no one knows what will work, and the majority of marketing is trying new things to see what will.
The problem is that we often don’t spend enough effort trying to identify, measure, and reduce the amount of money we throw away every single day. The larger your budget, the more various activities you’re investing in. This introduces complexity, making it harder to measure the effectiveness of your spend and more challenging to identify where waste is happening.
Before requesting more budget, ask yourself, “How can we stop wasting what we already have?” The first step is to realize that waste is happening and then go looking for it.
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Your budget is never right
Putting together a marketing budget is like trying to guess how many jelly beans are in a jar — your guess is as good as any, and you’re most definitely completely wrong.
My advice? Don’t stress about it. Acknowledge that how you allocate the money will change. Be prepared to make real-time decisions about where to cut and where to double down.
The key to maximizing your budget is spending it a bit at a time and making real-time judgments about where it will have the biggest impact. A marketing budget becomes obsolete the minute it gets approved.
This is a challenge for most marketing leaders because they lack visibility into the effectiveness of their marketing investments. Marketing attribution makes it even more complicated to gain clarity into what’s working.
Understanding the return from any tactic, channel, or investment is key to getting the most bang for your buck — and you must be able to do so with speed and accuracy.
Your assumptions are wrong
It’s shocking how often marketing organizations stick to the same approach over long periods. Marketing is constantly changing every single day. What worked yesterday won’t work tomorrow.
You should constantly be reevaluating your approach, your tactics, and where you invest your budget. Just because you’ve always done things one way doesn’t mean you should continue down that path.
There’s a difference between squeezing every last drop out of the orange and finding a bigger, juicier orange. Work smarter, not harder, and stop assuming that the traditional or historical approach is the most effective one.
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The path to higher ROI
Getting a higher return on investment from your budget is a lot less complicated than you might think. Here are a few considerations that will help you make the most of your budget, regardless of size.
1. Great marketing isn’t expensive
It’s easy to assume that powerful, effective marketing costs money. On the contrary, great marketing is rarely expensive.
When my mom emailed Chewy to return dog food because her dog had passed away, they told her to donate it to a local shelter and gave her a full refund. A few days later, she received flowers at her door with a personal note from Chewy about her dog.
Not only did she (and I) become lifelong advocates for Chewy, I’ve told hundreds of people the story. The kind gesture didn’t cost Chewy much, but easily earned them a hundred-fold on their investment. So it’s not surprising that they keep doing this, and whenever I share the story, I get comments from people who have had a similar experience.
Marketing is about making an impact. And that doesn’t always require spending lots of money. Having an executive appear on a podcast as a guest or having your team post regularly on LinkedIn are other smart, effective marketing tactics that don’t cost anything.
2. Cut your budget
Here’s a question to ask your team: “What if your budget was cut in half? What would you do differently?” The answers to that question can be quite revealing, and they can generate some innovative approaches to maximizing results within limited constraints.
Too often, we get comfortable with the budget available to us. That’s where waste can creep in. It’s healthy (and helpful) to reevaluate what’s possible with limited resources to uncover new and better approaches.
3. Measure twice, cut once
Wouldn’t it be great if you were 100% confident that every dollar you spent on marketing would generate a positive return on investment? There’s a simple way to significantly increase the confidence of every dollar you invest: validation.
When you go to the pool, you don’t jump into the deep end right away. Instead, you start by slowly wading in to check the temperature of the water. Why not take the same approach with your budget? Don’t invest large chunks of your budget on unproven platforms, channels, or tactics. Instead, run a pilot or do a test to see how effective it is and to find out what you may have overlooked.
There’s an old expression to “measure twice, cut once” and it’s extremely important to prevent mistakes that can’t be undone. The same applies to marketing. Before you make irreversible decisions with your resources, validate your approach so that you have the confidence necessary to go deeper into the pool.
4. Squeeze more juice from your marketing
Optimizing your marketing is one of the fastest and most effective ways to maximize your budget. Finding ways to do the same marketing activities better will generate a higher return on your investment.
Most marketing teams don’t have an optimization program — a formal process of continually improving their efforts to generate better results with the same or fewer resources.
Investing in building an optimization program is a guaranteed way to improve the ROI of your marketing in the short term, and it will profoundly impact your budget’s effectiveness in the long term.
You can’t budget for success
Fortunately, success in marketing isn’t correlated with the size of your budget. There’s no question that having more money to spend on marketing gives you more options. However, what matters most is how you spend your budget to have the biggest impact in the shortest amount of time.
Because marketing is inundated with requests and demands and changes happen daily, it can be easy to overlook the simple yet effective ways to get more performance from our marketing budgets.
You don’t need more money to get better results. You just need to take a renewed look at how and where you’re investing your market budget.