What budgeting mistakes are you making in Marketing Operations?

In my experience, budget plan fails if you are not aligning with business objectives, goals and GTM strategy. Budgets should be data driven and before finalizing, get buy-in from all the stakeholders involved. Change is constant, so it's important to be flexible and make adjustments as needed.

The biggest thing for the marketing ops team to do is get close with the finance team and align with their processes. It will make your lives way easier.

Here're 3 critical pitfalls to avoid in marketing operations 1. Workflow design from budget to metrics - As marketeers, we tend to overlook the financial goals and suffer to measure goals, end of the budgeting period. Establishing this in the beginning makes marketing and finance teams work in tandem. 2. One foot in the past and one in the future - Don't entirely base the budget as % increase on the previous year's. Clearly understand the business goals for the upcoming year and draw the budgets based on new realm of activities 3. Contingency and experimentation - Ear mark a good 10% for experimenting with new tech like generative AI and for spending on trends that can't be foreseen

Once we threw a bunch of money into marketing campaigns without testing them. We thought they were wicked, but our audience didn't. So, I learnt never jump into any production without minimal testing. The second one is verified & clear PnL model, especially if your product is complicated with subscriptions prolongation and various packages involved. If you can't visualize and present to the team crystal clear what we've earned and how much more we need to get by the end of the year/quarter, you'll never plan the budget right.

Failing to establish clear marketing objectives can lead to budget allocations that are not aligned with strategic goals. It's essential to define measurable objectives to guide budgeting decisions every step of the way.

Great point @Daniel Murray. Aligning mktg ops + finance processes includes aligning biz unit data with cash flow reporting to yield more accurate data for attribution and directional BI. 3 wins: 1- Draw stronger correlations between mktg and revenue. 2- Refine definition of “top-performing” channels/products/ partners to include those who pay on time/early, which may influence future targeting efforts. 3- Streamline processes across teams so mktg/sales KPIs are achieved more quickly.

It is critical to work with the finance team member aligned with marketing here. Typically an FP&A person. Ensuring that you have input into the chart of accounts and that your coding of expenses aligns with how finance records and reports is a huge time saver. Being able to cut and report on the marketing budget in different ways for different reports and for optimization is critical as well. Analysis of CAC and lifetime value of customers needs to be based in accurate cost capture and is a board level topic, while more detail optimization and testing within and across channels is important for the marketing team internally and not so much at the executive level.

I would also add to ask what the finance/operations team prefers at the start! This will help create efficiencies and prevent both you and your finance/operations department from doing duplicative work or having to worry about system merging. If the stakeholders have a preferred system, use it! If not, make a strategic recommendation. Research what software would make a good investment and present it to your stakeholders. Every company is at a different level in terms of process and operations! Know where you're starting so you can add value from the get-go.

Not leveraging appropriate budgeting tools is a significant mistake in the budgeting process. Relying on outdated or manual tools can lead to increased labor, higher error rates, and poor manageability. To enhance efficiency, accuracy, and visibility in budgeting, adopting specialized software or platforms is crucial. These tools can automate and integrate tasks, employ data visualization tools for better analysis and presentation of budget data, utilize project management tools for coordination and tracking, and leverage collaboration tools for effective communication with teams and stakeholders.

I can’t stress how important it is to avoid this mistake. I’ve found that tons of marketing teams stick to asking for money reflecting historical needs with maybe a couple $1,000 extra which is limiting where you can go strategically and the possibility of innovation. You end up doing the same marketing plans you’ve been doing for years and not expanding your reach or getting the attention you could possibly if you had been intentional about your budget and factored in applying new marketing strategies.

One thing that I have found helpful in the budgeting process is to identify your top 3 priorities to align your initial budget to successfully support those priorities as your entire budget is built. The key here is to really look at the end goal and identify what success looks like to allocate the necessary resources.

Budget misalignment can be a massive hurdle in landing a strategy, especially during transformative years for a brand (e.g. new media campaign, big bet innovation launch, a relaunch of the core). Having a focused (2-3 jobs to be done) and clear strategy with cross-functional + leadership buy in is the first step. The next is questioning the reoccurring investments such as corporate commits (blackhole with limited ROI insights) and the pressure to reinvest at historical levels in legacy buckets (“we have to have this many coupons, we just do”). Marketers that get this far are better equipped to design a budget that will deliver the strategic objectives/targets.

I couldn't agree more with this. I believe that not only aligning with the strategy, it's critical to have the right alignment and buy-in from the right stakeholders (top management and C-suite). The second point I would raise is how important it is to maintain the budget and ensure that sudden opportunities or a sudden change of strategy don't jeopardize the budget. Yet, keeping some flexibility or having a special budget line for those opportunities can help avoid this specific mistake.

Amen to this! If your budget doesn't align with the strategy you've presented and gotten approved by key decision-makers, there's slim to no chance it'll get approved. Always back your budget recommendations with your goals.

Start with your ideal numbers. Back your recommendations with research and strategic alignment. Then, when you've got it in a good place, prepare yourself to have a conversation with your operations/finance team. Advocate for your needs, but don't be too stubborn so that you wind up in poor sentiment. Compromise is critical. It will always make you better collaborators. And you want the operations/finance team on your side as a marketer! At the end of the day, it's important to level-set and make your budget work for you. You and your finance/operations department are one team at the end of the day. Find solutions together. Approach the conversation collaboratively!

Additional reasons to be flexible: - Competitive Edge: Adapting your budget quickly can give your business a competitive advantage by allowing you to respond faster to market trends and changes in customer preferences. - Resource Allocation Efficiency: Flexibility in budgeting enables efficient allocation of resources based on real-time needs, preventing underutilization or overcommitment of financial resources. - Innovation Encouragement: A flexible budgeting approach fosters a culture of innovation by encouraging experimentation and exploration, enabling your business to identify and capitalize on new opportunities.

It is a continously evolving landscape, and technology is enhancing it further. It is important to have a flexible budget that can be adjusted as needed. This means being able to reallocate funds to different campaigns or projects if necessary.

Being flexible and agile in budgeting means recognizing that business landscapes evolve. A dynamic budget, adaptable to market shifts, customer dynamics, and strategic changes, is essential. Adopting a rolling budget approach lets you make timely adjustments based on new insights. Including contingency plans and reserves prepares you for unforeseen challenges. Regularly testing scenarios, seeking input, and revising the budget proactively optimize performance, minimize waste, and position your operations to seize emerging opportunities effectively. It's about staying responsive and proactive in the face of change.

The thing that I try to incorporate in my budgeting is a little flexibility. It is great to have anything planned and mapped out for every dollar. Unfortunately, life isn't always so smooth and easy. Something may come up that you will need to jump on in the moment, so realizing that a budget is the best you can determine at that particular time, it is important to realize that things may change and you may need to be agile in your budgeting as well.

As a marketing leader, it's important to not create your budget in a silo. Often, you are not doing individual contributor work at this level. Prepare your budget by having productive conversations with your team. Gather reports and data. Ask them for their budget recommendations. Consider their answers and move your edits to a master sheet with notes and references to back your recommendations. If you're a part of a marketing team, creating and solidifying a budget should never be a one-person job! While you may be accountable for the final version, there are individual responsibilities you need insights into and feedback on to be successful.

A budget should be a collaborative and inclusive effort that engages all relevant parties. This can be achieved by clearly defining roles and responsibilities, actively seeking input and feedback, ensuring alignment and coordination with other departments, sharing both successes and learnings, and promptly resolving any conflicts or issues that may arise. Involving the team and stakeholders improves the quality of the budget, increases buy-in, enhances accountability, and contributes to the development of a budget culture and mindset within the organization.

Budget process is a learning process...measure outcomes and value created as input to budget process is essential. However, marketing must also have some freedom to test new things and fail, so not everything can be perfect return on investment. If not, there will be zero creativity in marketing and brands will become dull and "me too" look-alikes.

I find this to be one of the most overlooked yet most important things to consider when budgeting. In my experience, people tend to not want to shine a light on their mistakes, but if you do not then how are you expected to learn from them? Over the years, I have been involved with plenty of marketing strategies, website projects, etc. and if there is one thing I know is that they do not always go according to plan. To make improvements before the next project, meeting with those involved and reviewing what went wrong to do better the next time can often be far more valuable than just reviewing what went well. Calling out key inefficiencies (although should not have happened) will help your budget the next time around.

The best thing to do with any mistake is learn from it! We all do it, so let's learn from them and improve for the next time! Not only should we learn from our mistakes, but super smart people learn from other people's mistakes as well. Keep that in mind so you learn from not just your own, but other people's budgeting mistakes!

Get clear on what you spent your budget on last year and what that spending did for your goals, whether the goals were brand recognition or sales leads. Blindly basing your spend on "what we've done before" is a path to the same results - so be sure you like them!