When working with CEOs, we’ve seen too many companies take the shortcut of copying and pasting the existing year’s approach -- an easy way out, but one destined to drag down growth and profits. We think of strong, strategic, competitive businesses like world-class sports teams. Rather than tossing the same playbook at each opponent, they study the film of their competitors’ activities between each game and strategize how to change their own approach to impact their performance. 

But a surprising number of companies are bad sports when it comes to strategic business planning. According to a study by technology company Cascade, only about 68 percent of corporate leaders believe their company assembles a good annual strategic plan. Digging deeper, Cascade discovered that more than half of corporate leaders don’t even bother to spend a full day each month reviewing the progress of their annual strategies. As a result, only 10 percent of organizations surveyed felt they met at least two-thirds of their strategy objectives by year’s end.

To support your objectives, the task of calculating your marketing budget should take paramount importance. This becomes especially critical in uncertain economic times when companies are looking to cut expenses. The marketing budget you allocate for your marketing strategy should be built from the bottom up to drive the required growth for 2024. If done effectively, you’ll be able to justify and retain your marketing spend for next year.

Now, more than ever, CEOs and CMOs need to take a new look at their approach to planning and developing a custom growth strategy for 2024. Are you ready to do what it takes to truly be prepared for the year to come? Today, we will guide you on constructing a robust 2024 growth plan and how to calculate and justify your marketing budget to support your strategic endeavors.

Building Business Growth Strategies Requires a Three-Year Vision

Setting next year’s outcomes requires a long-term view of the road ahead. When undertaking your business growth strategy, begin by envisioning where you want your business to be in the next three years. What are your revenue and profit targets? How do you imagine your operations evolving, and how do you anticipate the landscape of your customer base shifting?

Here are three measures to project on a 36-month cycle:

• Projected Revenue and Profit: Having clear financial targets is the cornerstone of any growth strategy. By quantifying your ambition, you can reverse engineer the steps necessary to achieve it.
• Customer Landscape: Understand the segmentation of your customer base. Will you be expanding to new demographics, or will you deepen relationships with your existing clientele? In our last blog, we reminded you of the importance of targeting your high-value customers as a means of reducing waste.
• Growth Source: Assess where you anticipate your growth will emanate from. Will it be from new product lines, market expansion, or perhaps increased market share?

“Companies that have clarity in their future vision are more likely to realize their objectives. They set clearer goals, make better decisions, and are better equipped to navigate the complexities of today's marketplace.” - Brian Halligan, CEO of HubSpot.

Decoding the 2024 Goals for Marketing ROI

Once you've sketched your broader three-year vision, it's essential to dissect it year by year. Treat it like rungs on a ladder that starts next year and leads you to an apex in 2026. For this journey to the top to be successful, you need to define your goals for 2024 and beyond. For most B2B sales organizations, it looks something like this:

1. Determine your Specific Goals: These should be in line with your three-year vision, setting the stage for the subsequent years.
2. Customer Acquisition Metrics: Understand how many new customers you'll need to reach your revenue targets. Consider factors like the Lifetime Value (LTV) of a customer. If LTV seems challenging to calculate, a conservative estimate of the 1- to 3-year expected revenue can be a starting point.
3. Retention Metrics Matter: As renowned marketing expert Philip Kotler once said, “It’s much more expensive to acquire a new customer than to retain an existing one.” Examine your historical data to grasp the percentage of customers you lose annually or monthly. This 'leaky bucket' metric is crucial as it can significantly impact your growth plans.
4. Leads Needed: Utilizing your sales funnel data, calculate the number of leads you'll require. If, for instance, only 5% of your leads typically convert to paying customers and you need 1,000 new customers in 2024, you'll need to generate 20,000 leads throughout the year.

Calculating Your Marketing Efforts by Channel

Now, with an understanding of the leads required, it’s time to make sure your marketing machine is calibrated to derive marketing ROI from the proper channels. You’ll want to allocate your resources based on the three-step test we’ve outlined here:

1. Identify Top Channels: Depending on your business type, certain channels might be more effective. Is your audience more active on social media, or do they respond better to email marketing?
2. Estimate Spend Per Channel: Use historical data to determine the cost-per-lead for each channel. This will enable you to calculate the necessary budget for each marketing channel to generate the desired leads.
3. Staffing and Infrastructure: Ensure that once the leads flow in, you have an adequate workforce to nurture and convert these leads, and scale your business effectively. This includes not only the sales team but also the after-sales and operational staff to uphold service quality.

Crafting a Business Growth Strategy Action Plan for 2024

Now that you have your numbers and channels outlined, you’ll want to switch the levers on those channels that deliver the best marketing ROI for each dollar invested. Here’s how we recommend you keenly focus on efficiency:

1. Optimize Marketing Efforts: Evaluate the performance of each channel. If a particular channel's cost-per-lead is high, dive deeper to understand potential bottlenecks. This could involve assessing click-through rates, landing page conversions, and even the sales call closure rates.
2. Invest Smartly: Allocate more resources to channels that offer a better Marketing ROI. As the world-famous business magnate Warren Buffet states, “Price is what you pay. Value is what you get.” Prioritize channels that provide maximum value.
3. Cross-Functional Collaboration: A successful 2024 growth plan cannot operate in a silo. Marketing efforts should align with sales targets, operational capabilities, and customer service standards.
4. Technological Investments: In an era dominated by data and digital interfaces, investments in marketing, sales, and operational technologies can provide a significant competitive edge. In particular, you will want to invest in technology that helps you track the performance of your marketing investment and the progress against your growth goals.

Preparing for a Fruitful Tomorrow

A well-thought-out growth strategy for 2024, coupled with a justified marketing budget, can be your North Star, guiding you through the unpredictable waters of the business world. As you navigate your way, ensure that every dollar spent in marketing is an investment in future growth, and every strategic decision inches you closer to your envisioned future.

Stay tuned for our next article in the series, where we delve deeper into the intricacies of Key Performance Indicators and their pivotal role in growth strategies.

About Chief Outsiders:

Jack Bowen and Scott Wright are Fractional Chief Marketing Officers with Chief Outsiders, a national fractional CMO and CSO consulting firm. Bowen is an engaging, roll-up your sleeves leader who draws on 20+ years of C-level marketing leadership and growth experience with significant expertise in data-based, direct-to-customer (B or C) performance-marketing, driving both topline and profitability throughout – acquisition, conversion and sales operations. Wright has decades of executive leadership experience leading B2B and B2C businesses to accelerated growth across numerous industries. He works with CEOs and leadership teams to develop customer-centric strategies for brand differentiation and awareness, effective targeting, lead generation, customer experience, and the repeatable processes and core capabilities that create a foundation for sustainable growth. 

Together, they are part of a team of more than 120 seasoned and battle-tested Chief Marketing Officers and Chief Sales Officers who have guided over 1,850 B2B and B2C companies across more than 70 industry verticals.

Chief Outsiders executives have the experience to help businesses quickly figure out how to accelerate growth. They work alongside CEOs as members of the leadership team to develop strategies, build organizational and technical capabilities, and execute marketing and sales initiatives that create growth engines. Contact us today to accelerate your growth. Learn more about Scott Wright here and Jack Bowen here.

Up Next: Dive deeper into the world of strategic growth planning, ensuring your business isn't just reacting to the market but leading it. Stay tuned for Article 4 of our seven-part strategic business planning series: “Seven KPIs that Should be in Your 2024 Growth Plan”.

Full series on strategic business planning:

• Part 3: How to Establish a Strategic 2024 Growth Plan and Justify Your Marketing Budget
• Part 2: Accelerating Growth In 2024 with Strategic Business Planning
• Part 1: Why You Can’t Afford to Cut Your Marketing Investment for 2024
• Introduction: Accelerating Growth In 2024 with Strategic Business Planning

Authors:

Scott Wright Partner & CMO Chief Outsiders

Jack Bowen CMO Chief Outsiders