Since Forrester’s Planning Guide 2023: B2B Marketing Executives was published in late August, there have been many discussions with B2B CMOs about how to best approach budget planning for 2023. A clear pattern has emerged in the types of questions, and here are the top five.
1. Can You Elaborate On The “Spend Money To Make Money” Paradox?
The hypothesis behind Forrester’s 2023 planning guide for B2B marketing executives is that prolonged unpredictability of the global economy will drive short-termism, exposing marketing executives to unprecedented budget scrutiny and justification. To help B2B CMOs navigate these decisions, our analysis focused on spend patterns from companies that have managed to grow annual revenue by 20% or more over the past two years. The “spend money to make money” paradox aims to help B2B CMOs protect (and confidently request more) budget related to long-term initiatives (i.e., activities to connect brand to demand, customer engagement, data strategies, etc.)
2. How Much Marketing Budget Should Be Allocated To Technology?
There is no precise amount, as technology alone does not drive growth. The technology you buy, implement, and integrate should support how the company plans to grow. When you start with the tech and “back into” the business goals, it puts the tech in charge and perpetuates tech sprawl. Forrester has identified three steps to designing a revenue engine tech stack that supports growth. Rather than starting with “How much should I budget for tech?” or “What tech should I buy?” first answer the following questions:
- How does the company plan to grow?
- Do we have the six essential technologies and integrations as our foundation?
- Are we taking an outcome-focused approach to selecting the tech that starts with business goals?
3. What Do I Tell The Board/CEO To Expect For ROI On Brand Investment?
Brand is a long-term investment that companies can measure in several ways: via brand health surveys, brand lift studies, marketing mix modeling, KPI indexes within a campaign, among others. According to our research, the majority of C-level buyers surveyed say that they are moderately to significantly influenced by a vendor’s brand. We know that brand is important and plays a role in driving buyers throughout the lifecycle, but showing direct attribution is a challenge that CMOs face at all companies. Why? Because brand efforts are often one of many initiatives that reach audiences. It’s also difficult to directly attribute many of the tactics used for brand programs. Brand works in conjunction with demand programs, and its value should be calculated as such. Marketing leaders can show the correlation between how brand programs contribute to awareness, pipeline acceleration, win rates, retention rates, and other metrics. For the next click-down on brand investment, please read this blog from my colleague Karen Tran.
4. Can You Explain “Divest In Lead-Focused Efforts To Extend Beyond The Acquisition Pipeline”?
Companies should treat retention and growth within accounts with the same operational and measurement lens as new demand. Within the program budget, demand programs shouldn’t cannibalize the budget for reputation, engagement, enablement, and operations program budgets. To “extend beyond the acquisition pipeline,” the CMO must support the paradigm shift, implementation, and operationalization of the B2B Revenue Waterfall. This is one of the most transformational success projects and serves to reinforce how integral marketing is to the business. If this transformation is on your 2023 agenda, then you will need a strong marketing operations leader.
5. How Did Companies With Fewer Than 1,000 Employees Invest?
The minimum that companies with fewer than 1,000 employees that grew annual revenue >20% invested in marketing as a percentage of revenue was 3.1%. Conversely, 30% of companies with fewer than 1,000 employees that were flat to declining in annual revenue invested 3% or less in marketing.
Forrester clients can schedule guidance sessions to talk about their specific challenges or listen to our on-demand webinar. Non-clients can access a recent LinkedIn Live session, podcast, and our Planning Guide blog for additional insight.