Budgeting season is a stressful time of year. Hotel marketers all over the world are taking stock, itemizing every channel in every segment of their business, noting everything that worked, or didn’t, in the previous year.
NB: This is an article from Tambourine
If you’re lucky enough to be up year over year, maybe you’re scared to change things for fear of upsetting the delicate balance. Or maybe you’re looking to try some new things — but how do you budget for new things without a real test case? You run the risk of short-changing a strategy that could work, but won’t because you’re not funding it correctly.
Building a budget is hard work. And fighting for that budget is even harder work.
But it doesn’t have to be.
Budgeting season is the perfect opportunity for marketing and ownership to set and align expectations for the coming year.
If you’re armed with the data, the budgeting conversation should be productive, practical, and matter of fact.
In an effort to make conversations surrounding budget more productive, we’ve compiled tried and true strategies to arm you for your next round of budget requests.
1. Show Ownership The Opportunity
Hotel marketers trying to budget for new strategies have a tough road ahead.
How do you ask for the budget to try something new without demonstrable ROI? Ownership might see it as a shot in the dark.
In order to make a compelling case for something new, hotel marketers need to clearly articulate the opportunity.
Two questions stand in your way.
1. What are my goals?
2. Are my goals validated by real opportunity?
Once marketing has the answer to these two questions, they can build a defendable budget request.
For example, let’s say your goal is to increase weddings business. (AKA: Driving more wedding leads.) The first thing that needs to be done is to validate that opportunity.
Let’s be honest, if we don’t understand the opportunity, we are essentially guessing when it comes to budget. And if you’re guessing at budget, you’re setting yourself up for rejection when that request gets to ownership.
Part of marketing’s job is to build a compelling case for budget.
Let’s take this one step at a time.
HOW DO WE VALIDATE OUR GOALS?
We begin by understanding our audience potential.
If your goal is to increase wedding business, you’ve got to validate whether or not there is local demand in your market.
In other words: How many brides are recently engaged in your local market? What does that volume look like? How many channels?
Once you’ve determined there is, in fact, meaningful audience potential, you need to determine how much of that audience you want to budget for. This is called, “Share of Voice.”
Do you want to budget for 50% share of voice? 80%?
Let’s say that based on channel research, you’ve determined there are (on average) 100,000 brides in your local market. If you budget 50K, that’s 50% share of voice.
Asking ownership for budget in this way helps you validate your budget request.
On the flip side, if ownership comes back and only gives budget for 10% share of voice, you’re armed with the necessary data to have a very productive conversation about expectations.
Whether you come out with the budget you asked for or not, ownership and marketing should leave that meeting on the same page.
2. Show What It Takes To Do It Right. Or Cut It From The Budget.
The worst thing we can do as hotel marketers is to handicap a marketing channel by under-budgeting for its success.
This principle can be applied to almost every aspect of hotel digital marketing.
Let’s say you were given budget to build a new website, but no budget for media to increase direct traffic.
OR you received tens of thousands of dollars for photo and video content for Facebook and Instagram but didn’t get a budget for paid advertising to push it out.
These might seem like standard marketing laments, but what are they really? Poor business decisions.
In the same way that marketing must demonstrate opportunity in order to win budget, marketing must also get really, really good at educating ownership on the realities of what it actually takes to do it right.
That means building a real business case that fully articulates the impacts of underfunding.
Bonus: Marketing can use this same tactic in reverse to avoid chasing shiny new objects. There’s nothing worse than being defocused or diluting your marketing budget when asked to test the latest social media gadget targeted at millennials.
If ownership wants to chase something new, lean into it. Demonstrate how much it would actually cost to do it correctly. Can’t afford to do it right? Cut it from the budget.
Conversations surrounding budget should never be contentious. Instead, think of these conversations as opportunities to get the whole team on the same page about expectations for the coming year. What could be more productive than that?
