Mid-Year Review: How are Your Marketing $$ Being Allocated?

Chief Executive Officers think that their marketing leaders are focused too much on the creative “arty” side of marketing vs. the business helping the company drive results according to a study by the Fournaise Group.  We are fast approaching the mid-point of the calendar year where companies start scrutinizing budgets and resources if they are not achieving their planned growth.    As marketing leaders, this is the perfect time for you to be proactive and evaluate the results your team has delivered and how you may want to re-allocate the precious resources and budget you have to achieve greater results.

As you begin to review your marketing budget, take a look at how your dollars are being allocated.  After speaking with various marketing leaders, I have found the spend disproportionate in two areas:

1.       Segment

2.       Audience


If you look at your marketing spend, what is the segment that is getting most of the dollars?  Is it acquisition of new clients or retention of existing clients?  I find that most organizations get more excited about winning a new client than retaining an existing client.

When I do assessments on marketing spend I find that on average 60% of the marketing spend is on acquisition of new clients and 40% is on retention.  I would argue that it should be reversed to be successful.  Sixty-percent of the marketing spend should be focused on retaining your current clients.  It’s been documented thousands of times, that the cost to win a new client is more expensive/costly than retaining an existing client, yet when it comes to where the marketing dollars lie. It’s no wonder organizations are still trying to figure out retention and loyalty!

Ask yourself, who would the CFO be more pleased with, the person that brought it in a new deal at low margins and leveraged numerous resources to win or the person that renewed a client at high margins that used fewer resources?

In my next blog I’ll talk about Mid-Year Review:  How marketing $$ should be allocated by audience.






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