How to get budget to work with a marketing agency

How to get budget to work with a marketing agency

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This article is for Digital/Marketing Managers in Australia, who would love to work with a social/digital/marketing agency, but just can’t get their managers across the line.

Before we begin, I should introduce myself. As well as the guy behind the keyboard, I am the Managing Director at JMD, and I’ve helped countless managers build business cases to gather budgets for campaigns.

I’m in the #blessed position, where JMD wins more new business than we lose. I think that’s just what happens after a few years in the game with runs on the board. In saying that, we’ll often have a discussion with a passionate, excited marketing manager, who ends up deflated when their group manager or CEO refuses to approve budget for them to work with us (or any agency).

This is actually quite a common occurrence. Marketers are often hungry and keen to execute, so they’ll identify an opportunity, and then pitch it in. If that pitch isn’t perfectly framed to meet the priorities and needs of their manager (the budget allocator), then they’ll often leave disappointed.

If you’ve ever been in that situation, here’s what I’ve learned is the simplest way to get a signature and get on with your new partnership…

The ROI Assessment

Firstly, if you can prove that working with an agency will enable you to acquire more customers at a lower cost than existing efforts, you’ll typically find that you’ll get budget all day long. This is the hard one because if you’re pitching in a new strategy, you’ve really got no certainty that it’s going to work, but if you can find a way, it will make the difference!

Here’s how we like to frame it (using hypothetical numbers of course):

Start by understanding your current cost-to-acquire a customer. Divide your current marketing budget by the number of customers you’ve gained in a specific time period (perhaps the last quarter or last year).

This gives you your cost-to-acquire a customer. It may not be completely accurate (there may be far more variables at play, for example, you may work with a team of hands on salespeople), but it gives you a baseline/crude number to compare all other efforts with.

Now, If the average transaction value that you gather from a client is $3000, and your new agency can show you their work in similar industries where they’ve been able to land a sustainable cost-per-conversion of $50, I suspect your whole team is going to be digging to find budget everywhere for that campaign.

Here’s how the conversation goes down with your manager: “Hey, I did the numbers and our cost-to-acquire a customer last year was $X. I was talking with the director of X agency, and they showed me some work that they did would X other company, and got their cost down to $X. I think it would be worth us having a chat with them to learn more about how they did it – Would you be open to that?”

Other things that could help (depending on the nature of the ultimate decision maker):

The Client List

This can meet a couple of objectives. Client lists often bring credibility. I’ve had prospective clients open right up when they hear that we work with a brand that they aspire to be like. In saying that, if we work with someone remotely competitive to them, they’ll often shut down completely (understandably). There’s also often a little bit of ego at play here. If by working with us, you feel like your business is elevated to the same level as our peers, that might also help.

Case Studies

It’s not just about what your agency tells you, it’s what they actually do. Get them to provide you with documented pieces of work, and the results achieved. If they’re proud of their work, they’ll have no problem sharing it with you. This gives you an idea of direct capability.

Specific Pieces Of Work

Know your manager loves a particular campaign, or video? If they’re motivated by creative, ‘out there’ campaigns, then find out what your preferred agency has done in a similar space or to a similar degree that will get them excited.

Reallocate Budgets

We often find that marketing budgets are allocated to the same places due to legacy. That $2000/month SEO budget you got sign off in 2012 is still ticking away. Look at where your returns are coming from, from each tactical activity. You might find you’ve got a software subscription, or relationship that’s going nowhere fast, and reallocating existing budget is always easier than asking for new dollars.

The most critical piece of the puzzle is that you get to know your manager, and understand their priorities (this is probably good advice generally, whether you want marketing budget or not). Always remember, if they meet their objectives because you crushed it for them, they’ll love you forever.

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