Straight A’s: How to Survive Mid-Year Budget Cuts by Proving ROI
It’s July. But nowhere is it hotter or stickier than in those budget review meetings with the boss or CFO. Whether sales fell short or expenses are up, operating budgets tend to shrink this time of year. The problem is business objectives, results and performance expectations do not.
In my past corporate life, it would go something like this. I’d submit plans and cost estimates supporting my company’s annual business goals in January. Once approved, I’d get a budget to go execute a full-year’s worth of programs. But this money was not really mine. Like in many companies, there was an unspoken rule that if sales slumped or costs jumped, each department was expected to “give back” enough money from their budgets to cover the slack. Great heroism was attached to these “give-backs”. This resulted in lots of sandbagging and overestimating in the budgeting process. The only way to protect your budget was to show your programs were delivering significant ROI. Setting benchmarks and having measurement in place early in the year was the key to keeping Q3 and Q4 plans alive.
Agency life is not immune to mid-year budget burn. Its glaring reflection hits account billings when clients have to reduce hours or go dark. Being able to show ROI and justify the value of the work you do is the best budget block I’ve found. Here are the five “A’s” to help beat the financial heat and rally your ROI this summer:
Avoid extra costs. Mistakes cost money. Catching errors and omissions is a great way to save the client money and frustration. Document them.
Add value. Repurposing tools and content is a great way to extend client resources. Specialized training, software and association fees absorbed by the agency also add up for the client.
Align with sales. The field force faces even more pressure than you do. Work together. They take the pulse of the customers on a daily basis. Listen to the questions and concerns from the sales team and focus efforts there.
Adopt new skills. Innovation and technology abound. Find and master faster, cheaper ways to do things. Look for open source options, freeware and newly acquired digital skills, then apply liberally to client!
Analyze. Take a hard look at what’s working and what’s not. Kill the sacred cows and be ready to jettison programs that are costing too much and netting too little. The upshot is more time to focus on the good stuff that’s performing well.
School may be out for summer, but staying focused on the straight A’s may help you ride out the year with your budget mostly intact. And don’t forget to drink plenty of water and wear a hat, too!
Photo courtesy of sidewalk flying on Flickr.