Do You Budget For Outcomes?

There appears to be a trend in corporate America, and it started even before the recession knocked on our doors.

In one meeting on the 9th floor of corporate headquarters, someone in accounting decides what the marketing budget will be for FYnow. Then, up on the 14th floor, in the sales department, the goals for the next year are set.

So a memo arrives on the desk of the Marketing Director with a budget determined by one department and a sales goal determined by another, and now a plan has to be created.

I'm sure it sounds crazy, but wouldn't it make more sense to actually budget for your outcome. Set the sales goal and then decide how much it will take to reach that goal.

First determine what you want to accomplish.

Then decide on the who.

Next determine the how.

How much should be last. Obviously it might have to be adjusted. But, wouldn't it be great to adjust it with the outcome in mind?

To start with the budget already decided and then try to figure out how to accomplish the goals is really the same as beating your head against the wall. Except at least with the wall you might actually start to make a dent in it.

Do you budget for outcomes?

Jaci Russo

Sr. Partner/Brand Strategist

The Russo Group

Companies In A Recession

Recession by wmliu

Chief Marketing Officers across the country are faced with serious decisions regarding their budgets and what to do with them in 2009.

Basically, there are only three options:

1 - Don't change a thing - Ignore the media, their stock price and the rounds of layoffs and pretend like everything is fine.

2 - Pause - Cut just about everything and pull way back to ride it out.

3 - Plow Ahead - Realize that now is the time to keep going, spend money, capture market share.

Assuming that number one is completely out of the question, except for a couple of rare CMOs that are probably at the end of their 24 month job cycle and don't really care what happens next, that only leaves two choices.

The best way to choose between number 2 and number 3 is pretty easy. Think about it, what do you hope your competition does?

A McGraw-Hill Research study from 1980 to 1985 found that those businesses which chose to maintain or raise their level of advertising expenditures during the 1981 and 1982 recession had significantly higher sales after the economy recovered. Specifically, companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise.

So, what is your plan?