If marketers can't frequently and accurately reconcile actual costs against their planned investments, they'll inevitably over or under-spend, and they will inevitably be unable to deliver their plan goals. In an increasingly real-time, high-precision business environment, marketing needs to keep pace with other business functions or anticipate some negative changes.
Lessons from Mint
In the first decade of the century, personal budget management was revolutionized by the launch of mint.com, which delivered consumers a simplified way to manage their costs, and to align spending with their longer term goals. Today, mint.com continues to provide thought leadership and value to individuals managing their personal finances. In this blog, they provide best-practices for individual budget management, many of which translate to the business context, including.
Is Marketing doing better than individuals?
Conversely, 82% of marketers are reconciling expenses at a monthly or slower pace. While we expected to see the majority of the market fall into the monthly and quarterly segments, we were surprised to see 26% reporting that they never reconcile their actual expenses with their planned expenses. That is truly driving blindfolded.
What's in the way of reconciling expenses the right way?
1. Data mismatch.
2. Manual Reconciliation
3. Inability to connect actual expenses to planned expenses
4. An operational mindset in the Marketing team
As is so often the case, culture drives behavior. If the marketing team is committed to visibility, transparency, and operational detail, then expense reconciliation tends to happen more promptly and more accurately (even if it is still a tough, manual process). If not...those companies are most likely in the 26% of Never-Reconcilers. This matters for everyone in the marketing team, as we shall see below.
Consequences of poor expense reconciliation
1. Missing your target budget
2. Missing your marketing metrics
3. Reduction in marketing budget in subsequent years
4. Team and/or structural changes
How Plannuh can help