Balance: The Key to the Sales and Marketing Budgeting Process

I met a girlfriend for lunch the other day. We had both just finished with client meetings and it was an idyllic late summer, New England afternoon, so we sat outside. We sipped from tall glasses of iced tea, wore colorful but tailored clothes, and both had recent pedicures. It all felt very “Sex and the City” until we hugged goodbye and headed off in our minivans to collect our kids, our dogs and our dry cleaning. This is my life, and I love it. Balance. It's how I can be “Sex and the City” and Mega Mom within the same day. And it's how I can be in charge of both sales and marketing for my company.

Much like the juxtaposition of my personal life, my sales role and my marketing role don't necessarily go hand in hand. It took me awhile to figure this out; I constantly and consistently hear “sales and marketing” in the same breath — especially in small companies. Sales though is more like the “mom” role. It needs to be disciplined, consistent and concerned, always looking ahead to make sure everyone is going to be fed and helping everyone set realistic goals so they aren't disappointed. Marketing on the other hand, is “Sex and the City:” fun, colorful, spend-thrift, sexy, enticing.

Given that so many of us are asked to manage both sales and marketing, when it comes time to budget, how do we align the two? In my firm, we operate on the calendar year. Come late August, our controller hands me big sheets of paper with lines and dollar signs, but no amounts. The sticky note attached reads, “Please prepare budget projections. We'll meet in a month to review. Let me know if you have any questions.” Questions? Yes, I have questions. It's August; how do I think about January? I'm still trying to wrangle in another lead to make this year's projections and now I have to think about next year? I had a dream about an F.H. Perry Builder blimp flying over Fenway Park; can I up the marketing budget?

Balance. Sales first. Nothing can happen without sales. Thinking about January and February in August and September is a terrific way to figure out what current projects are going to carry us into the New Year. I can trend out potential change orders, think about current leads in the shoot and see us solidly through the first quarter. For the rest of the year, I try to think about trends. When do leads typically come in? What kinds of projects do we typically attract? What revenues have we achieved in past years? Then I put the dream cap on to stretch the possibilities. What revenue projections do we dare think about knowing what the backlog looks like? What leads can become projects? What dream project can we add to the list? Balance: a combination of in-the-bank work and reasonable dreaming.

With this balanced sales budget in hand, it's much easier to then align the marketing budget. Based on a consistent brand, the audience we want to reach, and the dream projects, I can think about how to mete out marketing dollars to achieve sales goals. Much like developing the sales budget, my marketing budget always starts off with the same foundation: plugging in what has always worked. Next, I add what I have already promised to advertising sales reps for the coming year. Lastly, I dust off my trusty dream-cap again and add in a few, perhaps wild ideas should the money tree be particularly fruitful next year. I never want to cut back on a marketing plan entirely if times are tough, but I like to know what's first to go because it was only a wild idea anyway. My self-check in the end is making sure my marketing budget is roughly 1 percent to 2 percent of my sales budget. This percentage is an industry standard and has been a pretty typical ratio for us in the past few years.

Luckily, for me, one doesn't need a finance MBA to create these budgets. In fact, it's probably better that I don't have this education because then I might discount gut, intuition and dreams. It's also good for my personal life: How could I be “Sex and the City” and Mega Mom without trusting these three things as well? And for the record, I don't actually drive a minivan…yet.

Sales and marketing don't necessarily go hand in hand