This is a story about the power of tithing. Tithing is the process of giving 10% of your gross or net pay to your church, or other religious institution. This practice is done by many Christians. My brother is a minister at a church in Fresno, California. I don't know how many of his flock tithe, but I know he does.

A number of years ago, when my brother was an assistant pastor in another church, he and his wife found out she was pregnant. It was a very happy surprise to them. There was only one problem, for my sister-in-law to stay home with their newborn child, she would have to quit her job. They would lose her income stream. My brother would need a 30% pay increase to make ends meet. (Assistant pastors always have to work a "real job" to support their families.) Faced with this challenge, what did my brother, Brother Tim do? Most people would cut back on their expenses to save-up some cash for the new-baby expenses and the loss of income. Not Brother Tim. He began tithing at the salary he wanted to make. That's right, he calculated what 10% was at his target salary, and tithed that. He believed and was investing in his future.

What happened? At his annual performance review at the electrical wholesaler where he worked, he was moved to an outside sales/support position, given a 30% pay increase and a company vehicle. Unbelievable. Yet, it happened.

What does this have to do with business? When sales slow, one of the first things cut is the marketing budget. To those of us who are marketing professionals, this makes little sense. "Sales are down so we should stop trying to sell" seems to be the official wisdom. A major issue marketing managers face, especially in capital equipment markets, is the sales cycle is longer than any given fiscal year - eighteen to twenty-four months is not unusual. It is very difficult to link this year's marketing programs to this year's sales. The only way to defend the marketing budget is to link it to potential sales, i.e. leads. If you don't have an automated marketing process, you are, frankly, doomed. The need for automating sales and marketing processes is a topic for discussion in a future blog.

Back to the topic at hand. Marketing budgets and the programs funded by them need to be based on what the sales target is xx months out. The spend is established by the target, not current market conditions. The benefit of this strategy, especially in a down market, is that while your competition is cutting their marketing budget, you are pushing ahead. Maintaining a consistent market presence provides your company with a healthy financial image. Your marketing programs impact is increased with each cut by a competitor. Moreover, marketing outlets, websites, direct marketing companies, magazines with lists of your target customers and others, are more willing to deal. The overall effectiveness of the monies you have go farther.

Now, some people will say, of course, their marketing budgets are based on sales targets! Those of us who have weathered other economic storms, or short-sighted strategies, know this is not so. "You can b.s. the fans, you can't b.s. the players." What we need to argue and push for is tithing for the target. That does not mean 10% of revenues go to marketing, but rather the marketing spend is based upon creating xxx amount of sales leads, of which xx% will be turned into actual sales.

An important aspect to consider is the length of your companies sales cycle. Most capital equipment expenditures are at least 18 months. Marketing budgets are 12 months, at best. There is little point in having a budgeted marketing program, only to see it get cut because it was not "effective" in generating sales within a fiscal year, when the sales cycle spans fiscal years. Be clear with the goals of your programs, and when the increase in sales can be expected.

Perhaps the hardest thing for people to accept is gaining new customers costs money. It can be seen as a lot of money. This is where the marketing professional must be able to state the facts. There is hard, empirical data on just what it takes to create customer interest and sales leads. Use it. Push back on the belief that your company's customers are somehow different than the rest of the world. Use case studies of successful companies, how they plan and execute successful marketing programs; how they track and measure success. It's just math. Calculate your marketing tithe, and go to the mat for it. If your company does not believe in its own future success, you probably shouldn't be working there anyway.

Ted's Marketing Blog