By Jim Gibbons
You’re in the middle of a tough year, fighting for every new customer, account and transaction. The competition is stiff and despite your efforts, the needle isn’t moving. Third quarter comes around and you get a message that the CEO wants to talk—your budget has been cut. What are your options?
At this point there’s not much you can do, other than start cutting. But there are some things you can consider—disciplines you can cultivate—that will put you in a better position next time.
By building your marketing plan in a deliberately inclusive (consultative) process that reflects the corporate strategy point-by-point, setting strategic priorities consistent with those of the organization, and cultivating the habit of over-communicating, you can reduce the likelihood of a budget cut and be ready to react when one comes.
Budgets are business, not personal
The view from the top is complex. There are many factors that can lead to spending cuts. A cut in the marketing budget does not necessarily mean that senior management is dissatisfied with marketing performance.
It’s important to remember, for the sake of morale, that management is merely making a strategic choice. That doesn’t make it any easier for you when the bank decides to redeploy resources away from your planned activity. But accepting it for what it is can help your relationships and establish gravitas within the organization.
Be involved in corporate strategic planning
The best marketing plan is one that springs from enterprise-level strategic objectives. The more intimately familiar you can be with those objectives and the thinking behind them, the better able you are to build a marketing plan that represents them.
By taking your place at the strategic planning table, you put yourself in a position to design and implement a marketing program that directly advances the corporate strategy. Do everything you can to be the brains of the marketing effort—not merely the hands and feet.
Ideally, marketing is seen as part of the strategic planning process. As the marketing domain expert, you become a co-owner of the corporate strategy along with the senior management team. And your marketing programs become the voice of the organization as it takes the strategy to the marketplace.
Make the organizational objectives your objectives.
It stands to reason that the board of directors and C-level executives will be foursquare behind the corporate strategic plan. So, if you want to be certain that they’ll be just as supportive of your marketing plan, make your marketing plan a reflection of the corporate plan.
A great way to organize the elements of a marketing program is to begin with corporate objectives (right out of the bank’s strategic plan). From there, you can use a linear planning model such as the classic Objective> Goals> Strategies> Measures (OGSM) model to align activities, budgets, timetables and the means by which you will measure your success.
By making the organizational objectives the starting place, you know you are spending on the right things. Prioritizing objectives assures that you are spending in the right proportions. And the “measures” section for each objective lets you establish the criteria for determining success, and gives you the case both to defend your efforts internally and to adjust midstream.
As a practical matter, building a marketing strategy that is explicitly based on the corporate strategic plan shows senior management that you know who you’re working for. Do this when things are going well, and it will be less uncomfortable when budgets get tight.
Leverage your strategic priorities
When caught off guard by a budget cut, most marketers will be tempted to make one of two mistakes. Some may try to achieve the reduction via incremental cuts across all programs and activities. Others may panic and slam on the breaks for all marketing. The former will leave all initiatives underfunded and anemic. The latter will save lots of money in a short time, while bringing the selling effort to a screeching halt—costing even more money in the end. Instead, understand that not all line items are created equal; leverage your priorities.
As you are planning your marketing activities, it’s smart to prioritize both objectives and the tactics designed to achieve each objective. By understanding that not all customers, prospects, products, services and markets are the same, you can assign priority A, B, or C to each objective and each tactic (direct mail, email marketing, direct marketing, collateral, branch promotion, outdoor, radio, television and so forth).
This discipline maintains focus on things that actually grow the bank, and it cultivates your thinking in cost/benefit terms. It also simplifies required midstream cuts.
When it’s time to make those cuts, look first at stripping away lower-priority objectives, complete with their related activities. These may be things like sponsorships and donations associated with brand largesse, or remedial support for underperforming products, programs, locations or markets. If you can achieve the desired cut by eliminating an entire priority-C objective, then you can preserve your primary tools at full strength.
Tie as much of your plan as possible to specific revenue objectives
While all marketers know that there are valid marketing functions that cannot be tied dollar-for-dollar to a revenue source, the greater purpose of marketing is to generate transactions. Everyone (even nonmarketers) can agree with this.
As you work through your planning process, the more of your budget is allocated to direct revenue-specific activities (activities like opening new checking accounts, generating mortgage applications, generating home refinances, cross-selling high-net-worth customers into multiple products, promoting fee-income via premium services), the more defensible your plan will be.
The more top management sees your marketing effort as revenue generating, the less expendable it will be when budgets get tight.
Promote, report and inform
Think of promoting the plan as part of your job. As you are translating corporate objectives into marketing objectives, work with people throughout the organization whose judgment you trust (and whose approval will be beneficial).
Bounce ideas off of them. Run drafts of your thinking by them. Discuss your big-picture ideas informally. This professional transparency will help break down silos, gain specialized insight into your process, and garner support from the very foundation of the strategy.
Depending on your organizational culture, you may want to form a marketing committee to work with you in this capacity. Or, you may want to keep it informal and involve different people for different parts of the plan.
As the plan takes shape, showcase elements that are particularly exciting. Perhaps you can talk in terms of an agreed-upon objective and a couple of options you are considering as strategies.
It might go something like this, “So, we’ve been considering option A, a direct mail campaign, or something more outside the box, option B, a digital banner campaign with retargeting. What do you think?”
Because you’ve worked through the process in this manner, the plan will have support before you present it for approval. Once it is approved, and you begin to implement, be deliberate about reporting activity and results along the way—maybe monthly or quarterly.
Perhaps this can take the form of a quick PowerPoint or email. It should have four components:
- This is what we agreed we needed to do.
- This is what it looked like as we launched it.
- These have been the results.
- This is what we propose to do next.
One benefit a knowledgeable, articulate marketing executive can bring to a bank leadership team is the ability to teach the team about marketing. Senior executives in banking—as well as many other industries—often desire to see a direct link between marketing spending and anticipated revenue. In many cases, this is a reasonable expectation, but there are some legitimate marketing functions that cannot be tied directly to specific current-period sales.
A great example of this is the area of community involvement. You know that your community involvement activity cultivates relationships, builds the reputation in the community, creates a perception of good citizenship, and earns thought-leadership status in targeted areas. Even the most black-and-white, nonmarketing executive would acknowledge that. However, not a single new customer acquisition, new account opening or customer retention can be attributed directly and exclusively to a community involvement investment.
By continuously educating the management team about both the direct and indirect nature of brand strategy and tactical marketing, you help your organization be smarter about marketing. And you blunt the tendency of some to think of marketing expenditure as luxury spending or outright waste.
You can do this through things like informal presentations, one-on-one conversations, and subtle elements such as explanatory cover sheets that provide information about marketing activity attributable to positive marketplace occurrences.
In general, you should not assume that senior management understands marketing, your strategy in particular or the reasons why for your tactics.
So, tell them what you’re going to do. Tell them what you are doing and why. And then, tell them what you’ve done and tie it to the associated results. In short, over- communicate all the time.
Intentional transparency will generate confidence among senior managers. As those around you become more familiar with both marketing and your particular approach, they will become more comfortable. Their expectations will become more realistic. And they’ll be more inclined to embrace the marketing plan as their own.
When the call comes from upstairs to cut the budget, there’s not much you can do other than cut the budget. But deliberate disciplines in the strategic process and in continuous communication will both prepare you to cut the budget intelligently (if necessary) and perhaps shield you from the necessity to do so.
As you cultivate the habit of over-communicating, you may find that you benefit from two-way communication, so that budget news will not sneak up on you. In the long run, marketing is an important part of a larger process. Understanding and embracing your role in the organization (and helping others to understand it as well) will make you and your group more effective.
James Gibbons is president of Gibbons-Peck Marketing Communication, a full-service agency headquartered in Greenville, S.C. The company focuses on branding, digital strategy, and advertising for community banks. Email: [email protected]
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