B2B Marketing with Dave Gerhardt - Episode #197 Summary
Release Date: November 28, 2024

In Episode #197 of B2B Marketing with Dave Gerhardt, host Dave Gerhardt engages in an insightful conversation with Rowan Tonkin, the Chief Marketing Officer (CMO) at Planful, a leading financial performance management company. The episode, titled "Strategy | How to Build a Marketing Plan and Get It Approved for 2025," delves deep into the intricacies of crafting effective marketing plans within the B2B landscape, emphasizing alignment with company goals, budget allocation, and collaboration with financial teams.

1. The Criticality of Marketing Planning

Rowan Tonkin opens the discussion by highlighting the perennial popularity of marketing planning sessions. He emphasizes that marketing planning is an annual ritual because it sets the foundational "guardrails and structures" that guide marketing strategies throughout the year. Rowan notes,

"Planning doesn't happen in a vacuum. It happens with CFO, board, investors,"
[04:28]

He underscores the lack of formal training for many marketing leaders thrust into planning roles, often finding themselves without the necessary guidance. Additionally, Rowan points out the frequent tension between marketing and finance, attributing it to differing perspectives on budget allocation and ROI expectations.

2. Aligning Marketing Goals with Company Objectives

A significant portion of the conversation centers on the necessity for marketing plans to align seamlessly with overarching company goals. Rowan stresses that marketing initiatives should not exist in isolation but rather contribute directly to the company's strategic objectives. He advises marketers to:

• Proactively engage with leadership to define or influence company goals.
• Translate company objectives into actionable marketing goals.

Dave shares a personal anecdote illustrating the challenges of budget planning, where initial resistance to paid marketing gave way to a structured, assumption-based budgeting process after demonstrating the need through data.

3. Approaches to Building a Marketing Plan

Rowan discusses two primary methodologies for constructing a marketing plan:

• Top-Down Approach: Setting high-level budget allocations and allowing teams to develop strategies within these financial boundaries.
• Bottom-Up Approach: Gathering ideas and strategies from various teams to estimate the required budget, which may later be adjusted based on financial constraints.

He advocates for a hybrid method, recommending a top-down approach with bottom-up input, ensuring that teams operate within predefined financial guardrails while fostering creativity and accountability.

"I do top-down guardrails because otherwise your team are just sitting there with a limitless mind and they're like, I don't know, like, is he going to give me $100,000 or $500,000?"
[22:50]

4. Budget Allocation and Types of Spend

Rowan categorizes marketing expenditures into:

• Strategic and Productive Spend (55-75%): Investments directly tied to key marketing goals, such as demand generation campaigns or product launches.
• Non-Strategic Spend: Necessary operational costs like legal fees, branding expenses, and other administrative expenditures.
• Experimentary Spend: Funds allocated for testing new ideas or channels, often referred to as the "CMO slush fund."

He emphasizes the importance of allocating a significant portion of the budget to strategic initiatives while maintaining flexibility to experiment and adapt.

"For every dollar of pipe that we create, I've got 12 cents to spend."
[31:28]

5. Demonstrating Value Through Metrics

A pivotal theme is the communication of marketing value in financial terms to resonate with CFOs and other financial stakeholders. Rowan advises focusing on metrics that translate marketing activities into tangible business outcomes, such as:

• Incremental Pipeline: Quantifying how marketing efforts contribute to potential sales opportunities.
• Cost Per Pipeline: Understanding the cost efficiency of generating each pipeline dollar.
• Return on Investment (ROI): Measuring the financial return derived from marketing expenditures.

He discourages reliance on vanity metrics that lack direct correlation to revenue growth, advocating instead for metrics that financial leaders prioritize.

"Marketers look at it often in a different way. Like, hey, for every dollar of marketing investment, I get $12 of finance."
[31:28]

6. Tools and Resources for Effective Planning

Rowan shares several valuable resources and tools to aid in the marketing planning process:

• Funnel Builder by Planful: A tool to calculate marketing budgets based on conversion rates and pipeline targets. Accessible at funnelbuilder.planful.com.
• Educational Content: Recommendations include courses and newsletters by industry experts like Ben Murray (SaaS CFO), Dave Kellogg (detailed financial blogs), and CJ Gustafson (Mostly Metrics newsletter).
• Books: References to "The Next CMO" by Peter Mahoney and Scott Todoro, which offers comprehensive strategies for operationalizing marketing organizations.

7. Addressing Common Challenges and Questions

The episode features a robust Q&A segment where Rowan addresses specific listener queries:

• Budget Tracking Templates: Rowan recommends using pivot tables to categorize planned, committed, and actual spend, emphasizing accrual-based accounting over cash-based methodologies.

• Balancing Spend in Smaller Organizations: For companies transitioning from word-of-mouth to formal marketing, Rowan advises collaborating with finance to model assumptions and treat marketing initiatives as experiments with defined guardrails.

• Hiring Integration into Marketing Plans: Rowan suggests incorporating capacity modeling and ruthless prioritization to align hiring needs with budget constraints, advocating for flexibility between program and personnel spending.

• Changing the Narrative of Marketing Spend: Rowan echoes practices like framing marketing expenditures as investments rather than costs, thereby shifting perceptions from revenue spenders to revenue accelerators.

"The obstacle is the way the truth will set you free."
[38:26]

8. Final Thoughts and Leadership in Marketing

Concluding the discussion, Rowan emphasizes the importance of leadership and transparency in marketing planning. He advocates for:

• Open Communication: Clearly presenting plans, associated risks, and potential outcomes to stakeholders.
• Educational Leadership: Teaching and aligning teams with financial principles and business priorities.
• Strategic Flexibility: Being prepared to adjust plans based on changing market conditions and financial constraints.

Dave commends Rowan for his practical and foundational approach, highlighting the session as an exemplar of effective marketing leadership.

"Rooting this in the basics and fundamentals of what it takes to be a great B2B marketing leader."
[52:51]

Conclusion

Episode #197 serves as a comprehensive guide for B2B marketing professionals aiming to develop robust, financially-aligned marketing plans. Through Rowan Tonkin's expertise, listeners gain actionable insights into financial collaboration, budget management, and strategic alignment, essential for securing approval and driving impactful marketing initiatives in 2025 and beyond.

For more resources and community discussions, join the Exit Five community at exitfive.com.

Notable Quotes:

• Rowan Tonkin on Planning Importance:

  "Planning doesn't happen in a vacuum. It happens with CFO, board, investors."
  [04:28]

• On Top-Down Guardrails:

  "I do top-down guardrails because otherwise your team are just sitting there with a limitless mind..."
  [22:50]

• On Metrics Alignment:

  "Marketers look at it often in a different way. Like, hey, for every dollar of marketing investment, I get $12 of finance."
  [31:28]

• On Transparency:

  "The obstacle is the way the truth will set you free."
  [38:26]

• On Leadership:

  "Rooting this in the basics and fundamentals of what it takes to be a great B2B marketing leader."
  [52:51]

This detailed summary encapsulates the essence of Episode #197, providing valuable takeaways for marketers seeking to enhance their planning and strategic alignment within their organizations.