Zero-based budgeting and planning for CMOs: Key insights from September’s Executive Roundtable

This year’s third Executive Roundtable in September once again brought together senior marketing executives to share ideas and engage in discussions. This time the main topic was budgeting and planning. In this blog, I’ll share key takeaways from the event and advice on how to enhance your budgeting and planning with a zero-based methodology.

Why to implement zero-based budgeting and planning?

Doing more with less – this demand came up frequently when we discussed marketing executives' top priorities for next year. Targets are getting higher, while budget constraints remain a reality. Marketing planning should always start from identifying business priorities and goals. But when resources are tight, aligning your approach with the right priorities becomes even more critical. This is where zero-based budgeting and planning come in.

At the September event, Marketing Executives noted that some parts of their marketing budgets tend to carry over from year to year. Human resources, media, and technology were common examples mentioned. While starting from a true "zero" was acknowledged as challenging, I strongly recommend embracing the principles of zero-based budgeting as much as possible.

Zero-based budgeting and planning involve evaluating all marketing investments equally, starting from scratch. Assess whether each activity, program, channel, or other expense deserves a place in the next budget cycle.

Even with a tight marketing budget, it’s crucial to scrutinize every investment: Why are we investing here? Is it driven by data—or just routine? Another crucial aspect is to compare your marketing budget to your strategy and business priorities. Is your budget aligned with business priorities? If not, proving marketing's value and securing stakeholder buy-in becomes tough.

One of the biggest advantages of this method is its ability to align marketing and business priorities while cutting unnecessary spending. No more investing in tools or channels just because ”we’ve always used them.” Various studies show that zero-based budgeting can help organizations reduce unnecessary costs from 5 to 25 percent.

Moving beyond copy and paste: a smarter approach to marketing planning

Too often marketing plans are copied from one year to another. Same priorities and activities. Almost the same targets and themes as well. Maybe some new trend your team wants to jump into. I know it can be tempting. And it can save time. But it can also prevent you from demonstrating the real value and impact of your marketing efforts.

Marketing plans should be aligned with business priorities and strategy. Engage with executive stakeholders to understand the business goals (if you haven’t already). But here’s the secret: don’t expect sales or business leaders to hand you a ready-made list of marketing priorities—they won’t. They aren’t marketing experts. That’s your role: to use your expertise to bridge the gap between marketing approach and business results.

A great tool to ensure your marketing plan aligns with business objectives is Forrester’s framework (picture 1). Framework must be completed one step at the time before moving forward. Start by clarifying the business objectives. After that you can determine marketing approach and priorities. Once the bigger picture is clear, you can then outline goals, actions, and identify potential risks or dependencies. Starting with key actions—something we see far too often—leads to a vague or even missing connection between marketing approach and the business priorities.

Picture 1. Source: Forrester, Six Elements Of An Aligned, Actionable Annual Plan

How to fill your marketing plans with insight?

One key topic that sparked great discussion at the previous event was how to gather the right insights for effective planning. Participants shared that their best ways include:

• Involving the entire marketing team in the planning process to gather diverse input.
• Engaging with key stakeholders to understand their priorities and focus areas.
• Leveraging data and analysis on marketing performance, programs, and channels.

Based on my experience and discussions with senior marketing executives, my top 3 recommendations to gather the insight are: 

• Understand business priorities and targets.
  Grasp what the organization aims to achieve in the coming years and identify any market obstacles. This understanding will help you pinpoint where marketing can provide the most value and support.
• Know your customers. 
  Investigate how they make decisions and how their behaviors have evolved over the past few years. Identifying your clients' buying patterns and decision-making processes will highlight areas where your influence may be lacking. This clarity allows you to focus your efforts more effectively.
• Analyze your current marketing state.
  Assess your marketing in relation to your targets and benchmarks. Decisions about programs, campaigns, and channels should be based on data, priorities, and outcomes—not instinct or gut feelings. Establishing clear roles and responsibilities within the team, along with regular reporting and analysis cycles, lays a solid foundation for success.

Would you like to join our next Executive roundtable event on November 28th?

So, when assessing next year’s budget, evaluate every investment with a critical eye. Does each element add value? Are your choices driving you toward your desired outcomes? Is there something you can cut to invest in higher-impact initiatives?

The next Executive Roundtable will take place on November 28th 2024, focusing on the impact of AI on marketing executives. You’ll find more information about the concept here. If you’re interested in joining the group next time, you can reach out to us.

Ps. Next year, the concept will expand to London and Stockholm, so stay tuned and follow Mavenfirst’s channels for more information.