Dieting is not foreign to most of us. Per a food & health survey released by the International Food Information Council Foundation, the number of people on diets to lose weight or to be healthier is up 22 percent from last year, at 36%. That’s right: one out of three individuals are on a diet. Most individuals will start a new diet in the spring, hoping to reach their ideal state by summer. By summer’s end, we get busy and distracted, and bad habits rush back. Yet, if we are honest with ourselves, we should practice self-control and live a healthy lifestyle composed of nutritious meals and regular exercise all year long.
Similarly, marketing budgets often go on a diet during the planning season. Everyone is full of good intentions. Then pressure mounts quarter to quarter and we lose sight of sound budget practices. We are no longer as fiscally responsible under tight deadlines and aggressive targets. Look at the infamous ZBB – zero-based budgeting. Studies show that within a few short years after going through a transformative ZBB process, suboptimal practices resurface and disillusioned CMOs are back to square one.
How do we go about adopting healthy client/agency practices and relations to get budget fit? Once you get there, how do you stay budget fit? Let’s explore best practices to make this a successful, sustainable process.
In my article “Wasted,” I highlighted the common symptoms of inefficiencies in the client/agency relationship and their root causes. To get marketing budget fit requires ending bad behaviors and adopting new, healthy ones. Bad behaviors may include poor guidance, inadequate feedback, suboptimal processes, and missed expectations. To rectify those, we need to recognize where those bad practices are occurring to fix them. Some advertisers create “efficiency dashboards” to monitor where waste might materialize, and to what degree: by waste type, by business unit or brand, or by region/country.
There are many diets out there, from low-calorie, low-carbohydrate, low-fat, detox diets, and more. Those vary based on a variety of factors and personal preferences. There are conflicting opinions as to whether they work. Detractors will claim that they do not work if these commitments are not part of a repeatable process that someone is willing to rigorously follow over time. If you subscribe to that point of view – I personally do – then we can also conclude that marketing diets only work if you can sustain healthy cost management practices.
Tips for maintaining a healthy marketing lifestyle and staying budget fit:
Tip #1: Assess your marketing activities and identify major sources of inefficiencies. I recommend using a variety of input points, ranging from quantifiable data, if you have it, to anecdotal: interview your agency leads, seek input from department or business unit leads internally, and analyze data from your most recent annual or semi-annual agency evaluations, just to name a few. Build a long list of potential inefficiencies in marketing. I recall a situation where a client learned of recurring poor client input briefing practices in a business unit as a major cause of inefficiencies (e.g. re-concepting, project delays, excessive FTE burn) as a result of feedback provided by agencies in the annual client/agency performance evaluation.
Tip #2: Size and prioritize each waste reduction opportunity. Once the list has been gathered, it’s essential to prioritize efforts. Not every instance of waste is of equal value – the frequency, the size of the opportunity, and the ability to influence it will vary significantly. For example, poor scoping/briefing may happen regularly, involving large budgets. The many options available to course-correct bad behaviors make this common waste factor rather high on the priority list of most companies. That said, changing the existing internal approval process or reducing the constant change of direction of marketing priorities – both very noble objectives - may be harder to execute realistically to yield maximum impact. One of our clients carefully selected their highest inefficiency drivers – they picked the top nine variables ranging from the number of project briefs (above an acceptable threshold) to the use of triple bidding (how often is triple bidding conducted for production as a percentage of total projects), and ignored many others, less actionable ones.
Tip #3: Establish a management system to monitor unhealthy behaviors. Once you start cleaning house and adopting a healthier set of client/agency practices, it’s imperative to have metrics in place to monitor progress or simply alert the management team of potential fallbacks. Advertisers implement dashboard-like views into various waste categories and have a pulse on whether they are successfully changing behaviors both internally and with their agency partners. One of our clients reports on inefficiencies monthly, by agency and by business unit within the marketing organization. It drives greater accountability internally (each VP can see where most of their “inefficiencies” come from), giving everyone – including agency partners – complete visibility to unhealthy behaviors and the opportunity to immediately course correct.
Tip #4: Reward for responsible, fiscally accountable practices. As marketers or agencies, we make decisions daily that might impact budgets: from big ones like approving work and related expenses to making judgment calls on the necessity of an in-person group meeting or approving travel expenses. These decisions – big or small – must not compromise great work and the ability of client and agency teams to collaborate effectively and meet their marketing objectives. Similarly, you wouldn’t expect dieting to prevent you from contemplating a new activity or going out with friends. If you see internal teams or agencies leading by example, making fiscally responsible decisions without impacting work, take the team to celebrate and reward them. I remember one client inviting their roster agencies to submit examples of successful efficiency plays or actions taken in the past year to drive responsible budget management. Once compiled, they used the best ones as case studies and celebrated the most fiscally-responsible actions at the brand’s annual agency summit.
It may be tempting at times to take short cuts, and sometimes we simply lose sight of the importance of staying budget fit. However, brand advertisers and agencies alike must constantly remind themselves that sound practices around budget management are the key to long-standing partnerships and marketing excellence.
Source: Agency Mania Solutions