RESOURCE CRUNCH: Aligning Technology Marketing People And Budgets To Get Results

This ITAC roundtable event was held on Wednesday, November 30, 2005 

Panelists

  • Jeff Hayward, Vice President of Marketing, CA Canada
  • Frank Huggins, Vice President, Business to Business, Mandrake
  • Walter Lowes, Manager, Marketing and Strategy, Siemens Business Services Canada Ltd.
  • Shirley Horvat, Director of Marketing, Sun Microsystems of Canada Inc.

    • The discussion was moderated by Bob Becker, Principal, SMA.

    With limited resources, why are Marketing Departments targeted? Why are they asked to do more with decreased staff and resources?

    • Marketing is the last true variable cost that can be cut as opposed to Manufacturing or Sales. The Marketing Department is an easy target and cuts are perceived as having less of a ripple effect on the company.
    • Marketing is the last four feet between sales and the client but is often seen as expendable. Those responsible for making the cuts do not understand the relationship between sales and marketing and the importance of marketing to the sales team.
    • It is tough to justify spending marketing dollars especially if sales are down. Marketing is held responsible.
    • Private companies have the luxury of developing a five-year plan and sticking to it despite fluctuations in sales that may occur along the way. As a result, they are more likely to hold on to the Marketing Department. Public companies, on the other hand, have to account for spending and sales on a quarterly basis. Shareholder scrutiny makes it necessary to react to negative sales by making cuts to Marketers.
    What influence does sales have over allocation of the budget from Head Office and how does Marketing deal with decreased staffing as a result of budget cuts?
    • The budget process is one of business case and is completely sales driven. Head Office will allocate funds to a location or country that has an emerging or breakthrough market and track the progress. If growth is significant then funds will be allocated.
    • Growth potential and market share are examined and funds are allocated accordingly.
    • Each geographical marketplace is reviewed and allocation of resources and potential returns are based on anomalies in sales and cultural factors. China, for example, will have a different allocation than Canada.
    • Funds are allocated to emerging markets i.e. Latin America because of sales potential.
    How is the budget allocated for staffing and discretionary spending?
    • We have a core staff and outsource everything else. If a project is not effective, the outsourced contract is not renewed. This is easier than cutting staff and entire departments.
    • We have restrictions on hiring. We hire the best and outsource highly specialized areas so if requirements change, downsizing isn’t necessary.
    Who does the Marketing Department hire? Do you look for seniority?
    • We focus on marketers who have astute strategies and can get things done.
    • We hire a mix of junior and senior people to address the concern of succession. Co-ops and interns are great value as they are less expensive and work hard.
    • We hire, train and upgrade core staff as needed. This is made possible through outsourcing transitional staff.
    • We hire a blend of senior (mentors) and junior (workers) to get the job done. Co-ops and interns are utilized as they will work hard to prove themselves and provide junior employees a management opportunity.
    Regarding marketing initiatives such as product management and event management, how do you allocate junior vs. senior staff to the various activities?
    • We have an in-house event planner and use outsourcing and co-ops to assist. Events, PR and advertising are high payback initiatives.
    • We outsource event planning. Each marketing manager handles his/her own regional event according to the budget allocated to that region.
    • We outsource all low-level activities such as event planning and lead generation. Regional managers have their own budgets and report spending to the Marketing Director.
    • We expect the managers and direct reports to handle initiatives. No outsourcing or hiring of Co-ops.
    How do you keep staff morale up and motivated when dealing with increased workload?
    • The staff cares about the mission, buys into company goals and puts forth the best effort. Those who don’t are weeded out.
    • The work has to be fun and the team has to be excited about the work. To facilitate this they conduct bi-weekly team conference calls and management gives full support to all members of the team.
    • Empowerment and fun are key when motivating staff. They hold team-building retreats and try to keep the work in perspective, providing a balance for the employees.
    What criteria do you use when hiring new people and what characteristics do you look for in a search firm?
    • We have ongoing meetings with prospects regardless of whether they are hiring. We encourage staff to be enthusiastic about the company and follow Jack Welch’s philosophy: Energy, Ability to Energize, Execution, Edge. Search firms have to be a good fit and we continue to build and nurture this relationship so the search firm understands us.
    • We have an internal search firm and stress relationship-building with these people. We use an outsource search firm for the “tough to fill” jobs.
    • Personal chemistry is important and we will often hire a less-experienced person based on this. We use search firms and foster the relationship to obtain better results.
    • It is important to spend time with the client in order to fill the position with the right “fit”.
    How is the discretionary budget allocated and how has the allocation changed over the years?
    • The focus is on senior events and generating and maintaining intimate relationships. Event criteria is reviewed and a decision is made based on whether the returns warrant the allocation.
    • The budget allocation has changed since 2003. There is a shift from large “stunt” events to more focused, intimate and targeted events. Breakdown is: 30-40% discretionary, 30-40% PR and advertising, 20% teleprofiling and teleprospecting and 15% direct mail and email/collateral.
    • Money spent on hospitality and lead generation has been scaled down. Funds have been reallocated to align closely with needs of sales so that money spent drives sales.
    • The discretionary budget is directed to support small intimate gatherings.
    Other points raised by audience
    • Need to recognize offshore outsourcing opportunities for lead generation and data verification.
    • Avoid having to deliver on over-promises by making sure all staff are in agreement with expectations, i.e. mutual success
    • Teleprospecting and teleprofiling are very profitable and inexpensive ways to generate leads.
    • “Search Engine Optimization” or internet search using key words is not widely used to obtain direct leads but has potential value.
    • U.S. market is very “U.S.-centric” as opposed to European markets, which are very global. American companies have had to change approach to deal with world markets.

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