(Note: Our blogs are not written by GenAI)
Annual Marketing Planning process is an important framework where the CMO can set the tone for Marketing’s success. New CMO’s can find annual planning a challenging process. However, it is your opportunity to align with the C-site, set a strategic direction, and earn your budget. In addition, this process will also result in concrete guidance for your team on where they are going and guide everyone to row in the same direction. This blog is to provide a practical guide to new CMOs for this must-do component of marketing leadership.
Start with Business Alignment
Some may consider Annual Planning as a glorified budget request or a tactical roadmap. However, smart CMOs consider it as a strategic tool for aligning marketing with the business’s top goals. Accordingly, the first thing CMO should do is initiate dialogues with their CEO and CFO on the top business objectives for the upcoming year. Many times, even the C-suite is behind the curve (they may be waiting for directions from the board). If this is the case, ask for the best guesses from the CEO and get agreement on an interim alignment. If there is a change in the business objectives, CMO will have to do a supplemental effort to further refine the marketing plan. You will find this supplemental approach much easier to accomplish than waiting for everything to be finalized. This way, you will also be regarded as taking the initiative rather than waiting for directions.
The business objectives identified could be combination of revenue targets, market share goals, growth expectations, or retention targets. Ideally the number of objectives is less than three and not more than five. Once determined, you can work with your Marketing Leadership Team (MLT) on translating these objectives to marketing metrics such as new customers, new pipeline, or retention goals.
Conduct a “Look Back” Audit
This tends to be the largest effort related to an Annual Marketing Planning. Ideally the span for analysis comprises a full year. Most often, this tend to be Q4 of previous year to Q3 of current year to accommodate timing of planning process. The audit should surface the following: performance output of overall Marketing and individual teams (such as pipeline created, leads, customer signups) along with key successes and failures and related learnings.
Most often, this content also tends to take up the most time in presentations. This is a huge mistake. While doing the look-back analysis is important, it should guide the plans for the next year rather than making it the main event of the marketing planning. Most of the material derived in this step, say at least 2/3rd, should be reading material for people involved, rather than part of presentations. This will make sure the presentations and discussions are fixated in the future.
The “Look Around” Analysis
Now you understand what is going on internal performance with the “look back”, it is also important to assess the external dynamics. Some of the areas to consider are:
Macro analysis – What are the economic trends affecting consumer / business spending? Any geopolitical issues that could affect business, especially market access? Any significant cultural shifts that could affect business?
Competitive landscape – A deep and honest assessment of competition is important for keeping future plans to reality. This will also help you to uncover strategic opportunities where competition is falling short.
Direct feedback from customers – this could come from online surveys like NPS, focus groups, and one-on-one interviews. This will help you identify areas to focus on marketing messages as well as the disconnects with customer’s actual experience.
Translate Business Goals into Marketing Objectives
Marketing objectives are required to focus planning exercises. As mentioned before, start with the business goals. Then define marketing’s contribution to each. As examples,
ARR growth: Pipeline creation by demand gen
Product launch goal: build GTM strategy
Market share goal: Plan for brand strengthening and competitive takeout.
Use the SMART framework as much as possible (Specific, Measurable, Achievable, Relevant, and Time-bound).
Some key target metrics that should come from this process include (by quarter ideally):
Pipeline & Number of Opportunities created from Marketing sources
Pipeline influenced by Marketing campaigns
Number of MQLs,
Brand recall and share of voice metrics
This is also a good time to update some strategic metrics to be used for the planning process. They include (1) Customer Lifetime Value (LTV), (2) Customer Acquisition Cost (CAC), and (3) LTV:CAC ratio, which is the single most important metric for assessing long term profitability and sustainability of the business model. (Commonly accepted benchmark is 3:1 or higher for a healthy business). These metrics are hard to estimate, so it is worthwhile to start with an initial estimation with a continuous refinement.
Mobilize your Marketing Leadership Team (MLT)
Your MLT is already very much involved in the efforts thus far, but you need to schedule a formal kickoff for your execution plan. Ideally you do this offsite which brings sole focus on planning. In the meetings, you should share your vision, key marketing objectives, and budget assumptions. Your MLT should comprise of the following functions with clear ownership of metrics:
Demand Gen: Forecast (pipeline or new customers) by channels, Cost per lead (CPL), and Cost of Acquiring Customers (CAC)
Product Marketing: GTM Strategy, enablement
Brand: Awareness, messaging, creative
Ops: Metrics, Martech, data governance
Create Budget Asks
Budget asks should be based on historical performance data (from “look back” audit) to make it credible. Allocation of budget dollars should be a direct reflection of the business goals and related marketing priorities. Breakdown overall budgets to large sub-channels (especially in Demand Gen) and provide measurable target results for each.
Also, it is a good practice to have at least three budget ask scenarios – for example, at 80%, 100%, and 120% of the anticipated budget. Provide comparison in returns in each scenario. This will demonstrate that you have strategic foresight while preparing the C-suite and your team to make informed trade-offs if conditions change.
Allocate Budget
You know all marketing channels are not created equal. How well each channel works depends on your specific business. Using look back audit and advanced tools like Attribution (check out Alloc AI Attribution tool) you will know the trade-offs between channels in terms of ROI. Do a portfolio approach balancing short-term vs long-term performance (ex: paid search vs SEO).
Make sure to carve out a portion of budget to brand/corporate marketing. This should be tied to metrics such as Brand recall or other brand measures. This is hard because none of the revenue metric will pick up contribution of brand. However, as a CMO, you are the custodian of the brand, and you will be falling short if you ignore this component. (Check out Alloc AI copilot for guidance on budget allocations).
Create your “Plan on a Page”
It will be useful to have your annual plan summarized on one page for easy consumption by C-suite audience. This will be like “Forrester’s B2B Marketing Plan on a Page”. It will have the following essential elements:
Business goals: Top level company goals
Marketing priorities: based on the company goals
Goals and KPIs: Specific, measurable marketing targets
Key initiatives: A short list of key initiatives planned for the year
Budget summary: Ideally with three scenarios and related returns
From Newbie to Navigator
Your first annual plan as a CMO will set the tone for your leadership. It is your chance to shift perception from “marketer” to “business leader” and perception of marketing from “cost center” to “investment”. Anchor in business outcomes, empower your team, and own the financial conversation. Done right, annual planning is not a chore but will be your opportunity to shine!