With 20 years of agency management behind me and thousands of conversations with business owners and CEOs, this issue still perplexes me.
When we ask business leaders what their budget is for their investment in marketing, nine out of 10 people tell us, “We don’t have a budget.”
If you extrapolate that, 90% of small to mid-size businesses don’t have a budget for their investment in what could be argued as the most important part of growing their companies.
All of them want to grow. All of them have aggressive growth goals. Most of them know they need to invest in marketing, but they still don’t have a budget.
How is that possible?
Honestly, I don’t think it’s possible. This is why I titled the article, The Biggest Lie in Business Today. But I want to be clear that I don’t think people are actively trying to deceive anyone, so let me explain more.
There are a couple of scenarios covered when someone says they don’t have a budget for marketing.
This specific situation is the most frustrating for us. First, we don’t base our pricing on what we “think” you can afford. That’s actually why we’re asking what your budget is or what you expected services like ours to cost you.
We don’t want to recommend services, even if you need them, that will require a $100,000 investment when you have a budget of $50,000 or even an expectation of spending $50,000.
It’s actually a waste of our time to put something together that is way outside your level of comfort. The reason we ask is so we can create a program that is inside your budget and so you’re comfortable with the level of investment and the work associated with the investment.
At Square 2, one of our core values is no fluff, so we’re not going to gouge anyone for services regardless of what you tell us your budget is. In fact, we love coming in under budget if that’s the program we think will work for you.
This is 100% legit, in my opinion. I get it. If you tell us your budget is $50,000, we’re going to give you a program for $50,000 even if we think you need one for $100,000. If you don’t tell us, you believe you’ll get a more honest set of recommendations. Fair enough.
However, you should tell us that is your intention. The best relationships are the most open and honest, right from the start during the sales process. If you have a budget but want us to recommend what we think you need, just tell us that.
We frequently give prospects a couple of options. In this case, we could give you an option that matches your budget AND one that matches what we think you should invest in to reach your goals.
Now you have two customized programs to consider. If staying on budget is critical, go with the budget program. If hitting your goals is critical, go with the program designed to get you to your goals. It’s all up to you, and you have all the options in front of you.
By not telling us, we’re left to guess, and that doesn’t always produce the best results for you and your company.
We have steps in our sales process to work with you to design your program based on what you want to invest, and we will guide you through that process, sharing with you what we expect to be able to do at different levels of investment.
Once you match up your expected results with your expected investment, you should be able to clearly see what level of investment will produce what type of growth for the company. Now you’re in a position to make an informed and educated decision. That has been and will continue to be our goal.
I understand this one too. Many companies have underinvested in marketing historically, and that’s why they’re struggling to grow.
Again, by being honest with us, we’re in a better position to help you figure out what your budget should be and what level of results to expect at a variety of investment levels.
You don’t have to be embarrassed. We’ve seen it and heard it all. Instead, you should work with a partner to help you develop a reasonable budget and then align that investment level with solid, experienced-based expected outcomes.
Again, we typically provide a few program options for clients. We might show you something that produces X results for this level of investment, something that produces 2X and the associated investment, and then something that delivers 4X and the investment required to do that work.
Now you have three options to consider when making the best choice for your company. But we can’t do that work when we don’t have any budgetary data to work with.
If any of these scenarios are true, then telling us you don’t have a budget is actually a lie. Perhaps it’s a well-intentioned lie, but nonetheless it’s a lie. It’s not a lie we’re going to judge you on, but it’s not helping us get off to a solid, trusting and productive start as partners.
There is one more scenario that begs investigation.
In this case, you should work with a partner like Square 2 and create a budget. We’ve done this for many clients over the years, and it’s easier than you might think.
Almost every company has money allocated for marketing-adjacent expenses – those baseball tickets, the annual holiday cards and the marketing programs that you’ve been running for years and know in your heart are a waste of money but you keep running them anyway.
Consider that trade show you go to every year but never know what you actually get out of it. You always question if you should go back and talk yourself into it by saying something like, “If we don’t go, people will think we’re out of business.” Maybe if you don’t go, people will think, “Wow, those guys are smart – this show isn’t what it used to be.”
Here’s one other area to consider when looking for budget. Every company has a worst-performing sales rep. They never hit their goals and do the minimum. While they might be everyone’s buddy, you know deep down they should be let go.
Do yourself a favor and let your worst-performing rep go. Transfer all those leads and opportunities to your better reps, and invest the money into getting more and better leads for your better-performing reps. I guarantee this will lift up your entire revenue team and help you get to your revenue goals.
When it comes to budget, there are always ways to find the money to structure a program to fit what you’re prepared to invest in. As long as your expectations are aligned with that investment, you can do extremely well investing money into marketing.
You should even be considering using a system to help set and manage your marketing budget. Just like you have systems to control payroll and company spending, you can have a system to control your marketing budget.
This all starts with being honest with your potential agency partners. Sign an NDA before you talk if you’re concerned, but go into those conversations expecting to share everything, no matter how painful.
Remember, when you go to the doctor, you have to tell them everything so that they can treat you accurately. The same holds true for your business. Be honest and open. That’s how you’re going to grow revenue and get a healthier business.