Are you getting the right budget for all of your company’s research needs? Unfortunately, the answer is “No” for many insights team leaders. Most companies determine what the overall budget increase allowance is going to be for the coming year (unless you are unluckily in a budget cut or neutral situation) and then have to compete with other departments if they need anything more.
Insights are the fuel for the business growth engine, and the annual planning process is the perfect time to make sure you’ve planned to have enough fuel for the upcoming 12 months.
So, what’s an insights leader to do? Here’s 5 best practice tips for improving your chances that your research budget will actually meet your company’s needs.
1 – Get Prepared
Evaluate the past year’s research and document how and where it contributed to making better decisions. Did teams avoid making costly errors? Did a new messaging strategy lead to improved sales? Did a new product get launched leading to a new revenue stream? Don’t be shy about asking for this input from stakeholders as the list of research results is a great way to prove the value of research.
Was there a shortfall in last year’s budget? If so, identify the ramifications of the shortfall. Estimate the opportunity costs of research deliverables being missed or delayed and the costs of being understaffed.
Are their new research tools, techniques and suppliers that save time/costs and/or improve the value of the research? Identify these and include them in upcoming plans.
2 – Align with Key Business Objectives
Interview all key business leaders to identify each of the strategic business objectives that must be addressed next year, by brand or division. These could include business objectives like increase product trial, optimize online presence, and Go / No Go on new product(s). By the way this may seem obvious, but “learn more about customers” is not a business objective. Unfortunately, I’ve seen this in too many RFP’s to miss mentioning it here.
When probing business leaders about what they need to learn to achieve their business objectives (the research objectives), make sure that all key research topics:
- Align with the key business objectives
- Can yield actionable results
- Avoid “nice to knows”
Then, work with your brand team to stratify research opportunities into two to three tiers: say A, B, and C priorities. While we’d like to treat all of our brands and products equally; it’s just a reality that some have more importance and thus demand more resources than others. This doesn’t mean you should ignore strategic learning opportunities for lower priority brands; they likely also need marketplace insights to support growth. As feasible, look for secondary/syndicated research options and other lower-cost research options to support better decisions for those brands and products.
3 – Create and Pitch the Budget
Now that you’ve gathered all the background information, you need to sit down and create the actual budget. You’ll likely have some tough decisions to make so it’s a good idea to build a few different “what if” scenarios based on different levels of funding.
If your business objectives include major new initiatives, you need to be certain to have covered those – this is the time to advocate for more dollars.
How MUCH to allocate is tricky and there’s no set rules (way back in the day, the marketing research budget was typically about 10% of the marketing budget). Research costs are dropping like crazy and there are more DIY options than ever. You just need to be sure you carefully weigh the risk and rewards of all techniques carefully. For example, I just recently ran across a company that provides very robust Marketing Mix Modeling for less than $80k, a far cry from the $300k+ cost companies have charged for this in the past. This shows the importance of staying on top of industry changes.
Consider activities that can be dropped to release resources. Does every project need a full report or would a topline suffice? Are those brand trackers still providing the value your company needs?
Here’s a sample partial annual marketing research plan that demonstrates how research objectives and methodologies align to business objectives.
4 – Implement Proof of Concepts If You Can’t Get Projects Funded
If you still have too many project requests and not enough budget to execute them all, one option is to check with new suppliers and see if they will run a free, small proof of concept test.
It enables you to get directional feedback on a new product or service idea making it easier to find budget for more projectable research if the concept appears to hold promise. And, it gives the vendor an opportunity to establish a working relationship with you while demonstrating their capabilities.
5 – Monitor the Progress and Adjust
An old adage attributed to Ben Franklin, “an ounce of prevention is worth a pound of cure,” is still true today and applies to insights leaders. You and your team should set up periodic checkpoints for the annual research plan to be sure that their strategic priorities have not changed. This will help ensure that project goals are being met and that budget dollars are being maximized.
Sometimes even well thought out plans need to be adjusted based on changing business circumstances. Keep adding to your alternate scenarios as situations arise so that you and your business partners see the impact and trade-off of each alternative and gain internal alignment on available options. Then you’ll be better prepared to make adjustments to plans well before it becomes difficult to take action.
A Final Review
It’s already September so budgets are being finalized and it’s likely the last chance for you to amend your budget for 2020. Hopefully this article has given you some points for making sure you are getting the budget your company needs to be more successful.
Need help? Olivetree Insights can help you create your annual Marketing Research plan and budget. Contact Carol@OlivetreeInsights.com to get the most out of your research budget.