Felixforge for Strategic Marketers

Marketing budgets

Now I have spent my entire working life in the product marketing function of large software companies. Each year I go through a planning and budgeting cycle. I ask for alot and get very little. I know it is not just me - I have many friends, in similar roles, and they have the same frustration. I think I understand why but lets explore my logic.

There are three key Marketing functions in any large organization. Corporate Marketing where the CMO sits and primarily governs the brand. Field Marketing ususally reports into the regional General Managers. Finally Product Marketing will report into the Heads of R&D for the product / business units. Each of these marketing functions has an annual budget. The question is - how is that budget allocated and in what proportions?

THINK GLOBAL

Corporate Marketing needs the big bucks to spend on promoting that brand. Consistently that investment only returns a 5% success rate (meaning out of 100 people you market to at this level only 5 will retain any kind of recall). The tools for Corporate marketing are advertizing, PR and the Web prodominately. These are high cost mediums and combining that with the 5% success rate means you need to increase that investment even higher.

ACT LOCAL

Field Marketing is the closest to customer in terms of customizing the messages for their particular market. They are also closely aligned to revenue targets and revenue generating marketing activity. That being tha case they can justify large budgets as long as they are bringing in the customers.

BUILD THE FRIGGIN THING

Now we come to Product Marketing. Arguably the most important function in any business (I am not biased). This function takes the product to market, packages and positions it in a way that makes it attractive to the target market. Here is the problem. Product marketing does not really use advertizing and PR too much and there is no real revenue drivers (not sure you would all agree with that - but it depends on the industry and the company). The key measurement is building products that make sense and making sure they get to the customer in a way that makes sense.

So there we go. I have little budget because my marketing friends in corporate and field get first bite of the cherry and I then find it hard to justify awareness and revenue generating activity that they are already doing. But that's OK...my job is far more mentally challenging (at least that is my story).

Software for Marketers

What is the primary software package used today by marketers? Well sadly, as research would indicate Microsoft - MS Word, MS Excel and MS Power Point. Typically, organizations leverage static documentation that usually reside in a folder icon on someone’s desktop. More recently, Customer Relationship Management (CRM) software has been increasingly used helping to improve the information management capabilities across business processes. Effective CRM systems can increase an organization’s ability into customer lifecycle dynamics, but it rarely predicts outcomes of new products, market messages and potentially market re-framing programs.  This rapid pursuit and adoption of CRM applications, has given rise organizations across industries are seeking ways to improve their ability to incorporate sales and marketing, product, and customer data into their business processes. Improving the information management capabilities of both CRM and EMM systems will effectively promote and measure the effectiveness of new product offerings, sales strategies, and marketing campaigns. 

More recently, a newer breed of marketing software that has been introduced, Enterprise Marketing portfolio management (EMM), comprises the processes involved in the planning, executing, monitoring and managing an organization’s marketing activity. EMM software spans three functional domains: marketing operations management, campaign management and lead management. It is a critical component of the CRM technology ecosystem with its footprint in operational, analytical and collaborative CRM.

Look for my posting later this week where I will be discussing a recent case study of an organization that has recently implemented a CRM ecosystem and has dramatically increased their ability to predict, monitor and manage key marketing initiatives using their new system.

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Market Planning: How Often Should I Plan?

As it would play, most organizations plan annualy usually consistent to their operational or financial cycles. Planning in of itself has to be a competency that an organization must possess in order to produce profitable innovation across the enterprise. Most importantly, planning must be part of a vicous cycle, rather a mundane routine for producing static documents that will sit on a person's desktop and remain isolated - until the next planning cycle, of course.

Instead of routinely investing into the market planning process annually, usually characterized by incremental increases in budgets, why not explore more trigger-based or dynamic-marketing processes. This requires continuous surveylance of attributes, behaviours and conditions across segments that could have gone missed in annual planning cycle. After all, many industries, particularlry high-tech or those with much shorter product lifecycles - require this level of flexibility in order to respond to changing demands and requirements of market segments. This type of planning process requires the constant engagement of marketers in their markets, inside their customers, seeking for high potential opportunites for investments. 

How often do you all plan?