We’re all wired to want more. More customers, more growth, to test more channels, creatives, and copy. And to do it all, we’ll often need more budget (the holy grail).
Important note: You can also apply these same principles if you’re a freelancer or an agency and you want to convince a client to invest more in their marketing.
Three steps to justify your increased marketing budget
Step 1: Present them with a real, tangible result
If there’s one thing you need to keep in mind as you pursue extra budget, it’s that humans are easier to convince when there’s evidence. In other words, if you can prove, conclusively, that you can take £10 and turn it into £20, it makes asking for £100 far more straightforward.
Tracking KPIs like sales growth, customer acquisition costs (CAC), customer retention rate (CRR), and lifetime value (LTV) will give you the data you need to change people’s minds. Those key decision-makers are more likely to respond favourably if you can draw a straight line from investment to positive ROI.
Meanwhile, another thing people respond to is social proof. If you’re a lone voice in your mission for more marketing budget, you can be easily dismissed. But if you get buy-in from sales or other key stakeholders? That could make even the most frugal CFO sit up and take notice.
So, before you pitch to the C-suite, take your proposal to your senior colleagues for their input – for example, the sales leads. If they understand how crucial this extra spend is to them hitting their numbers, you’ve suddenly got a groundswell of support behind you.
Step 2: Model out your TAM, SAM, and SOM
It’s not just your recent performance you have to prove to decision-makers; you need to convince them there’s a real opportunity for growth out there, too.
You can do this by modelling your TAM, SAM, and SOM:
- TAM (Total Addressable Market): This is the maximum market size or revenue your business can generate by selling its product or service.
- SAM (Service Addressable Market): This is the market segment within the TAM you can comfortably target with your product or service.
- SOM (Service Obtainable Market): This is the realistic portion of the market within the SAM that you’re aiming to capture in the next five years.
Once you’ve worked this out, you should build an ROI calculator to justify the increased investment. If you need help mapping out your TAM, SAM, and SOM – or if you want my advice on creating an ROI calculator to capture the effectiveness and scalability of your marketing spend – get in touch.
Reminder: The people holding the purse strings will understand the opportunity in front of them (in this case, revenue growth) – but they won’t care about marketing jargon. That doesn’t mean you shouldn’t use the theory behind it in your attempts to net more budget, but plain language and clear numbers will resonate more than a bunch of acronyms.
Step 3: Investigate competitors and show the gap
If you’re sensing a theme, it’s that you can’t simply ask for more budget — you need to prove quantifiably that there’s a need and justification for it. Show, don’t tell.
This is where another quirk of human psychology comes into play.
Like many of us, company owners and leaders like to keep up with the Joneses. If you can point to a gap in performance between your business and its competitors (and demonstrate how those competitors are benefiting), you’ll make a more compelling case for bridging that gap.
To do this, use baseline numbers and industry benchmarks to frame the context. Then use competitive analysis tools to show where you need to make up ground in critical areas (e.g. search performance, offline exposure, social media impressions, etc. I’ve written about tools for measuring competitor performance here. And here’s a solid tech stack for competitive analysis.
So, if we’re using the example of getting more SEO budget, you’ll want to draw that line from increased rankings for high-intent keywords, to more qualified traffic, to improved conversions and higher return on investment.
Bonus 4th step: fight your battles elsewhere
If you keep hitting brick walls looking for more money after you’ve demonstrated the potential for growth with a boosted budget, it might be time to take your talents somewhere else.
Sometimes you need to make that call, for your own sake. Life’s too short to work with people who don’t understand the value of what you do. Make the progress you need to make, and move on to pastures new. There’s no shortage of opportunities in the market – especially when you have the data-led results to show for your work.
In summary: remember, people like choice (even CEOs + CFOs)
On the above points, you’re going to go a lot further, faster, if you can prove extra budget equals increased revenue. Decision-makers often want to retain control, and so giving them a fluid choice of budgets based on your research (small, medium, large) is a far easier sell than a fixed proposal with a “my way or the highway” ultimatum.
Ideally, you manage to get what you’re after. But if not, they might sign off on a slight increase as a proof of concept. That at least gives you something extra to play with, and if you achieve the results suggested by your analysis, it makes that next budget request even easier.
This article is based on one of my LinkedIn statuses. If you connect with me over there, you’ll get regular growth marketing insights like these in your feed.
Oren Greenberg has a proven track record for growing startups and scaleups as a strategic on-demand CMO. To speak to Oren about what you can achieve with Kurve as a growth marketing partner, get in touch today.