This article is part of a four article series, following on the Budget Planning Handbook we’ve published recently. You can find the handbook here: The Ultimate Marketing Budget Planning Handbook. This is the last installment in the series but not the least important as it involves improving your overall results.  

Improving results through budget planning is a challenging task for marketers. It involves balancing multiple variables—often unknown—while making difficult tradeoffs between scalable channels and smaller ones, and between high-performing campaigns and underperforming ones. Imagine a circus act, balancing spinning plates on wooden sticks; that's the level of skill required to manage these complexities.

The drive to improve results typically stems from a strategic shift: the need to increase profitability or boost volumes in specific strategic markets. The process is akin to reducing waste, but here the target KPI is not a budget constraint but a performance metric goal, such as lowering the Cost Per Acquisition (CPA) or increasing the Return on Ad Spend (ROAS).

 Steps to Improving Marketing Results

 1. Defining Clear Objectives
The first step in improving results is to establish clear and concise objectives. For example, you might aim to reduce CPA by a certain percentage or increase ROAS by a multiple. This clarity in goal-setting helps align the entire team and provides a benchmark against which to measure progress.

2. Identifying the Root Cause
Understanding the root cause of performance changes is crucial. Determine whether the driver of the change is external, such as a market shift or a new competitor, or internal, such as a change in your product or service offering.

Create a cohort report, combining both paid and organic results into one cohort
- Identify if there is a consistent deterioration across cohort progression across all
cohorts, or specific cohorts
If all cohorts are deteriorating around the same period, the root cause for the decline in performance is most likely an external cause: 

Examples of external factors include events like the Covid-19 pandemic, elections, popular TV shows like a new Netflix release, or even weather changes.

If only recent cohorts are not developing as expected, the root cause for the decline can be isolated and categorized as an internal cause / marketing cause.

3. Recognizing the Point of Diminishing Returns
Identify the point of diminishing returns in your marketing channels. This involves analyzing performance data to see if certain channels are already operating at a loss or if further investment is yielding minimal returns. Knowing when to pull back is as important as knowing when to push forward.

4. Correlating Changes to Performance
Track any drastic changes and correlate them to shifts in performance. This step involves detailed data analysis to understand how various factors are impacting your results. For instance, a sudden spike in CPA might be traced back to a specific campaign or external event.

5. Making Trade Off Decisions
Decide on tradeoffs between scaling and achieving goals. Sometimes, you may need to cut back on certain initiatives to focus on more promising areas. This step requires a strategic mindset and the willingness to make tough decisions that may seem counterintuitive in the short term but are beneficial in the long run.

6. Cutting More Than Planned
Often, achieving significant improvement requires cutting more than initially planned. This might involve reducing spend on underperforming channels or campaigns more drastically than initially comfortable. However, these cuts can free up resources to invest in more effective areas.

Becoming a Performance Ninja

Following these steps can transform you into a performance ninja, drastically improving your efficiency and control. This reset is often necessary for any company engaged in performance marketing. It’s a strategic move that can lead to better resource allocation and enhanced results.

The Path to Profitable Scaling

Improving results is not a technically difficult process. The challenge often lies in the desire to scale. Most marketers enjoy increasing spend and seeing results grow, making it feel counterintuitive to cut back. However, this reset is essential for returning to profitable scaling.

As mentioned in the previous articles in this series, reducing waste  is integral to the marketing funnel. A reset can create new grounds for growth, setting the stage for more efficient and effective marketing strategies.

In conclusion, while improving results through budget planning involves complex decision-making and strategic adjustments, it is a critical process for any marketing team aiming to enhance performance and profitability. By following the outlined steps and embracing the necessary changes, marketers can achieve significant improvements and set their company on the path to sustainable growth.