- Step 1 - Situation Analysis
- Step 2 - Objectives & Issues
- Step 3 - Target Market analysis
- Step 4 - Marketing Strategy
- Step 5 - Marketing Programs
- Step 6 - Financial Plans
- Step 7 - Measurement & Controls
- Step 8 - Executive Summary
Hopping off the soap box, let's talk about how Financial Plans fit with the Marketing Plan. There are 3 parts to the FP section; financial metrics, forecasting, and budget for expenditure.
Financial metrics come from your CFO. It is beneficial to include some company financial data to help justify and compare the forecast and the marketing budget/contribution. The financial metrics section should include a reference to the latest income statement, cash flow statement and balance sheet. Targets or KPIs such as sales revenue growth, EBITDA, gross margin for example should be specified.
Forecasting is usually a joint exercise with other key stakeholders. The forecast should be based on data and not just on someones best guess. The sales forecast may also drive the marketing expenditure as a percent of gross revenue. The forecast can be broken up into myriad types; market or segment sales, product sales, cost of sales, and/or by channel.
The most commonly known financial metric for most marketers is the budget for expenditure. I would guess most Modern Marketers usually get handed or negotiate the amount of money they are allowed to spend on marketing activities. Beware of this all-to-common culture. It only cements your position as a cost center. Include in your forecast amounts that Marketing will contribute to the business objectives and tie the expenditure to these numbers. For example, include the % contribution to revenue as a forecast amount. Use 'net contribution' as a foundational measure of the effectiveness of marketing. Show 'revenue per lead' in place of 'cost per lead'. You'll still need to plan your marketing spend, but we all know how to break that number up, so I won't delve into that concept here.
Once we have our forecast and marketing spend outlined, it's time to talk about how we will measure our herculean efforts to make it all happen.