Marketing Plan – Step 6 ‘Financial Plans’

These are the steps for creating a proper marketing plan:

Step 6 – Financial Plans.  This is the section where the Modern Marketer tends to demur.  After all, isn’t this the sandbox where the big boys (girls if you prefer) play and talk about things like net this and gross that?  Why should the Marketer get involved or even begin to try to understand this stuff?  The answer is; because for marketing to make a difference and a contribution to the business strategy as all Modern Marketers should be striving to accomplish, you have to understand the financial language and you have to be able to show how Marketing can and will drive the business growth and/or profit.

Mission Possible

Your mission, Modern Marketer, should you choose to accept it, is to change the culture at your company from seeing the Marketing department as a cost center to seeing Marketing as a business builder or revenue engine.  In order to accomplish this mission, you MUST understand the financial metrics and how Marketing will affect those metrics.  Until you are able to have this conversation with the C-suite, you are relegated to simply another lowly cost center that the executives see as a necessary evil, but aren’t even sure why.

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.


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