Last week we covered the wrong ways to answer the question: how much should our marketing budget be…?” Now, let’s focus on better ways to answer the question that will determine your success and quite possibly your career longevity!
- “The budget needs to be aligned to sales/revenue projections… what are the sales & revenue projections?”
It’s always a bit awkward to answer your boss’ question with a question of your own, but it’s impossible to determine the proper hotel marketing budget without knowing the overall revenue targets AND how each sub-segment is expected to contribute to the total revenue pie. Once you know the actual revenue targets, you can carefully consider the resources you need to “climb the hill” that’s been put in front of you. And then, even after you know how “high” the hill is… you need time to put your plan and ultimate budget request together.
- “I need $____ in funding. ____ new people. _____ product changes to be made. And _____ department to report to me.”
Whoa. Does that sound bold and frightening?We understand if it does, but budgeting time means it’s time to put on your big boys and girls pants and tell ownership EVERYTHING you need to deliver the results they are mandating! Surprisingly, many senior tourism and hotel marketing folks think they are restricted to simply asking for advertising money. If you need more people on your staff to achieve the revenue target, then you need to ask and be prepared to make a simple business case for the added overhead. Same goes for changes to the product; if your physical product or service experience requires additional investment, now is the time to ask! And last but not least, if someone else’s department is inhibiting your results, ask for control of it…. Or forewarn ownership that results may be hampered by folks you have no ability to manage and improve.
- Last year, we achieved a marketing CPS of X.
To achieve next year’s budget, I need $_______ .”
CEOs and property owners no longer want to hear about “branding initiatives” or logo colors… they expect their senior marketing leaders to contribute to revenue in a measurable way, communicate in number-speak and be accountable for tangible results. So it’s important to have complete fluency in the KPIs that affect the bottom line. As an example, if you know last year’s marketing cost-per-sale (CPS), you should be able to extrapolate that against future revenue targets to determine the budget required. But remember, you will also be expected to reduce your CPS over time as you learn and tweak your programs.
Think it through!
Remember, when ownership asks you for your budget request, take time to carefully think about your answer. This may be the first and last time you get to ask for the things you really need to achieve the goals they have set for you.
Tambourine drives revenue for hotels and destinations worldwide using advanced marketing technology. The firm is celebrating its 30-year anniversary. For more information, visit Tambourine.com.