Marketers this time of year are faced with a difficult problem – how to budget for customer engagement. Not only is this perhaps the most stressful time of year for marketers, with inboxes full of spreadsheets and meetings full of political maneuverings, this is also the time of year when different departments have the opportunity to become more closely aligned as budgets are set up and approved.
We ran a poll in our recent webinar asking the following question:
How does your current budgeting process account for customer centricity?
- It’s fundamental to our budgeting process.
- We figure it out after budgets are complete.
- Our products and services drive our budgets.
- It’s a separate line item.
- Customer centricity is so far off our radar.
- Budgeting PROCESS??
The results of the poll were not surprising to us. 17% of our attendees reported that their products/services drive their budget. 17% said they figure customer centricity out after budgets are complete. And 17% said customer centricity is a separate line item.
Why Budget for Customer Centricity
When Econsultancy conducted their survey for Digital Marketing Trends, they asked companies to state the single most exciting opportunity for 2018. The results? Customer experience (or CX) came in first (beating content marketing and mobile marketing).
How do we go from exciting business opportunity to quantifying the journey/the customer centric approach? What is standing in our way?
Part of what is standing in our way is our approach to marketing itself. We can no longer afford to look at the marketing universe through a funnel. A funnel centric view is short sighted and limiting, even if it always shows up in the budget.
What we need is a customer centric view that encompasses the entire customer journey. Such a view will help us engage with the customer across all stages of the buying lifecycle. No matter where the customer is in their buying journey, you will be ready to engage with them appropriately. The question is, how do you budget for that?
The Wrong Way to Get Started
The most important thing to know: Do not set customer centricity aside as a “line item” in your budget. Line items are easily displaced, reallocated, and borrowed from. You want your customer centricity initiative to have power. You do not want it to be an afterthought.
Making customer centricity a dedicated line item ultimately undermines the importance of customer centricity as an initiative. It will likely be seen as a pet project, and it won’t be integrated into the company culture. In fact, having the customer centricity initiative as a line item will introduce friction and slow down the customer centric transformation. Morale will be negatively impacted because expectations won’t match resourcing.
The Right Way to Do It
Budgeting for customer centricity is all about how you allocate your budget. Funding customer centricity throughout your entire budget firmly affixes the customer centric mindset within your entire marketing organization.
Creating a budget centered on customer centricity will create a proof point that the entire company is behind the customer centricity initiative. It will drive customer centricity down to the very tactics that enable it. It will assign ownership and accountability throughout the journey and across your organization and erase all doubts that customer centricity is a critical organizational initiative. It will also accelerate the customer centricity transformation in your company and entrench customer centricity (fending off budget clawbacks).
How to do it
The SPB&M model is a straightforward methodology for bringing strategic alignment and harmony to your budgeting process.
The proper approach to steps 1 and 2 ensures alignment to customer centricity in your budget. In order to facilitate alignment, you must look through your customer centric lens to (1) answer questions like the following to understand your operating context and strategies and (2) gain agreement across the organization on the answers to the following questions:
- Is there alignment to the 3-5 year plan?
- What is your operating context? Growing market? Heavily regulated?
- Where will revenues come from? New customers or existing?
- Which customer lifecycle stages or initiatives reflect the highest marginal return?
- How can we engage with customers that give us a unique competitive advantage?
Once you have answered these questions, you can move forward. Take the following, straightforward steps to budget for customer centricity.
- Determine who owns the customer journey in your company.
Watch our recorded webinar – Who Owns the Customer Journey?
- Map and institutionalize your customer journey.
Watch the recording of the Mapping the Customer Journey Webinar here!
- Quantify performance along the customer journey.
Watch the recorded webinar – Quantifying the Customer Journey – here!
- Define operating context and organizational strategy through the lens of customer centricity.
- Use the SPB&M customer centric model to allocate your investments.
- Manage and adjust spend throughout the year to achieve optimal customer centricity results.
Following these steps will help you create a customer centric budget that you can follow throughout the 2019 year to take your customer centric initiative from slideware to action. Don’t forget that the customer journey is a team sport. It only works if everyone is on board.
Check out our recording of the Adjusting Your 2019 Budget for Customer Centricity webinar for details you might have missed, and download the slide deck here!