Blog for Building Materials Companies

What’s Buried in Your Building Materials Marketing Budget?

  |  Posted in Budget

What’s Buried in Your Building Materials Marketing Budget?

One of the biggest challenges for marketing building materials is that everyone is treated like an expert in marketing – except the marketing department itself.

In industries like technology and consumer packaged goods, marketing is respected as a discipline. In most building materials companies, however, it seems like marketing is the only department where everyone is an expert.

These companies only let experts manage their finances, handle legal issues or run their factories. Even HR is now becoming run by experts who know how to attract and retain talent, as well as how to keep the company out of legal trouble.

They Haven’t Made This Shift When it Comes to Marketing.

Some examples:

I recently asked the head of marketing of one of the leading brands in building materials how he would know if the $500,000 they spent at a trade show was a success. He looked at me with a straight face and said, “In a few minutes the CEO is going to tour our booth. If he likes it, it’s a success.”

He didn’t like it when I told him I would fire him if I was the CEO. I asked him what made his CEO an expert in marketing. He acknowledged that the CEO was not an expert in marketing but that his job as a marketing leader was to make the CEO happy based on the CEO’s opinions.

In a company where any senior person can offer their uneducated, anecdotal opinion of what is good marketing, it’s hard to develop expertise.

I am also seeing more and more companies who have bought into the promise of marketing automation with programs like Hubspot, Marketo and Pardot. For most of these companies, it is like buying a Ferrari but not knowing how to drive it.

These programs aren’t a substitute for expertise – they demand marketing expertise in order to perform. If you don’t treat your marketing department as respected experts, sophisticated programs like these are a waste of money.

This brings me to the subject of this article, what’s buried in your marketing budget?

Is Your Marketing Budget a Dumping Ground?

When I work with a company, I usually review their marketing budget as part of my process. When I ask them how much they spend on marketing, I’m often surprised by how large the number is.

The amount they say they spend on marketing seems out of proportion for the activities they are pursuing or for the size of their business.

When I take a closer look, I can then see why their budget is so large. Marketing budgets are often dumping grounds for expenditures that no one knows where else to put. Or for expenditures that the rightful owners don’t want to manage or be held accountable for.

Here are some non-marketing expenses that are frequently dumped or lumped into the marketing budget.

  • Sales Meetings – A sales meeting is a sales expense, not a marketing expense. You may want to use the creativity of the marketing department to produce your sales meeting. It’s easy to view this as free as you are using internal people, but what you’re really doing is taking the marketing department away from their primary task, which should be to grow your business with better marketing. If you want to use your marketing department, the budget should be under sales and the marketing department should charge the sales department for their time. You may find that it’s better to outsource the meeting to experts and let the marketing department do marketing.
  • Sales Allowances and Rebates – These may be sales or product expenses but they are not marketing expenses.
  • Company Events and Employee Rewards – Once again, because there may be some creativity involved they frequently are part of the marketing budget. These are HR expenses.
  • Customer Events and Reward Programs – The same as above, except these are sales expenses.

And the list goes on.

Using the Marketing Budget as a Dumping Ground Has Two Problems.

  1. It shows a lack of respect for marketing and reinforces the view that marketing is not a serious department staffed with experts.
  2. If the marketing budget needs to be cut, the actual marketing programs that can most help the company grow are the most likely to be cut. Some of the sacred cow budgets that may need to be cut or eliminated will frequently be protected while real marketing budgets are slashed. When budgets are under the correct department, they have to stand on their own.

Treat Your Marketers as Experts

More building materials companies are waking up to the benefits of treating their marketing departments like respected experts rather than expensive order takers.

It’s a two-way street. If you treat your marketing team like respected experts, they have to deliver by providing you with quantifiable results. No more, “Isn’t this creative?” or some anecdotal or cherry-picked piece of good news.

A good place to start is by reviewing your marketing budget and shifting budget items to where they belong.

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About The Author

I am the leading sales growth consultant in the building materials industry, I identify the blind spots that enable building materials companies to grow their sales and retain more customers.  As I am not an ad agency, my recommendations are focused on your sales growth and not my future income.

My mission is to help building materials companies be the preferred supplier of their customers and to turn those customers into their best salespeople. Contact me to discuss your situation.