This time of year finds many marketers pouring over their budgets for the coming year, trying to figure out how to stretch precious dollars as far as possible while trying to keep the finance and marketing folks happy (which is nearly impossible to do).

I think we need to step back and rethink how we approach budgeting for marketing and establish some new rules. I submit for your consideration the new BUDGETS rules:

Blow it up. How many times have you started your budget-planning process by copying last year’s budget and pasting it into a new spreadsheet? From now on, start fresh. Don’t include things in this year’s budget simply because they were in last year’s budget. How can you expect to improve results if you always start with a copy of the previous plan?

Understand your profitability. This is how you make finance happy. Not all sales are created equal. Some of your products and services are more profitable than others. Talk to your finance team and determine where your profits really come from and build a budget based on growing that part of the business.

Don’t start with a number. When you start budgeting with a total number in mind, you box yourself in and put roadblocks between you and innovative tactics. Instead of starting with an overall figure, start with objectives and goals. Let them drive the budgeting process instead of a magic number that is probably just based on last year’s budget.

Goals are about more than measuring sales. There should be two sets of goals in your mind: marketing goals and communications goals. Marketing goals are most often related to revenues and profits. We want to increase sales by x% over the next 12 months. Communications goals are tied to your market position and branding. They detail what you want people to think about your company or products. They are less tangible than marketing goals, but just as important.

Educated guesses are OK. Setting budgets can be stressful because it feels like we are locking ourselves in for a long period of time. We almost never have all the information we need to make the best decisions. Let’s come to terms with that and realize that we don’t need all the answers. Sometimes we need to just look at the information in front of us and make an educated guess (emphasis on the educated part). The best budgets are never set in stone, but are flexible. If your best guess turns out to be wrong, you can always revise the budget accordingly.

Try something new. Be intentional about funding at least one new tactic in your budget. Again, doing what you have always done is not good strategy.

Short is better. It is a budget, not a novel. Keep it as short as possible. The page count of your budget plan is in no way related to how successful it will be.

There you have it. The BUDGETS rules for budgeting. Now, get cracking, because next year will be here before you know it.

This entry was posted on Tuesday, December 20th, 2011 at 9:14 am and is filed under Marketing Minuet, Marketing Strategies. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.