Balanced Marketing Plans: Taking a Portfolio Approach to Drive Marketing Impact

During planning season each year, we see marketing leaders gather with their teams to understand the market context, identify challenges and opportunities, and define the right investments to hit targets.

In many respects, marketing planning can be like managing an investment portfolio. You can think of each individual initiative as an investment and your goal is to maximize marketing impact over time. Tactically, this comes down to understanding your options, choosing the right initiatives and adjusting your mix in order to strike the right balance for your specific goals.

Portfolio Development:
Understanding the Options

The first step to constructing a balanced plan is to understand the investment opportunities available to you. There are numerous areas marketing teams can invest in: existing or new programs, technology, people, agencies, segments, products, communications and many more.

We typically recommend grouping your marketing investments into three broad categories:

  • Incremental investments: These are largely focused on improvements in established areas, such as devoting more budget on core growth channels or driving conversion rate improvements in existing funnels. You have high confidence that they will pay off, typically quickly.
  • Foundational investments: These are investments with longer payoff periods but will allow you to scale marketing impact with medium to high confidence. Common areas might be a website overhaul, new marketing automation tool, adding team members, or brand and positioning work.
  • Big swing investments: These higher risk, higher reward investments can unlock big improvements if you get them right, but often take more time or resources to prove. Examples include going after a new market segment, changing pricing, building a partnership motion or entering a new distribution channel.

When we approach marketing planning or solicit ideas from our teams, there’s often a bias for incremental investments. This is natural given our familiarity and comfort with lower risk investments. Overcoming this bias and brainstorming ideas across each category helps to uncover a greater range of options, allowing you to build a more balanced portfolio. The categories can often reinforce each other, as well. For example, improving ad copy may be an incremental activity, but investing in personalization software can be a foundational investment that helps you to make many more incremental improvements, faster.

Portfolio Selection:
Choosing the Right Initiatives

Once you have your options laid out, it’s time to prioritize and choose what’s worthy of investment. While there are many prioritization methods, one we see used frequently is RICE. This method originally became popular among product managers to allocate engineering time, and it has since expanded into other domains like marketing. The four components of the RICE method are:

  • Reach: How many people will this impact within a specific time period?
  • Impact: How big will that impact be?
  • Confidence: How confident are we in our reach, impact and effort scores?
  • Effort: How much will this cost in dollars or people time?

For each of the above, you can approximate actual numbers, or just assign a value like Low=1, Medium=2, High=3. Some prefer more granular options like 1-5 or 1-10 or using bigger differences in values like 1, 3, and 9. If you’re just starting out, keeping it simple and using it to facilitate a discussion of relative value is key.

Putting them together: Reach x Impact x Confidence / Effort = total estimated value per unit of effort. The higher the number, the higher the priority. (Of course, you may choose not to do something or override the prioritization for strategic purposes.)

From there, you then select the set of initiatives you can tackle with the resources at your disposal, sequencing or grouping them accordingly. Keep in mind that choices may reinforce or benefit each other, resulting in a 1+1=3 situation, which can also impact your decision making. For example, a foundational investment in a podcast or influencer marketing strategy might fuel content to improve your SEO or advertising efforts. A big swing awareness campaign paired with a flagship event might increase the success of your sales team and customer marketing efforts.

While this exercise can be subjective, it’s a good way to frame the relative benefits and tradeoffs of your various options. And the better the selection of each marketing investment, the better the overall outcome of your marketing portfolio.

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Portfolio Evolution:
Adjusting Your Mix

The first time you go through the RICE prioritization method, you may end up with a lot of incremental investments at the top of the list. These often have the highest confidence and take the lowest effort. While these initiatives are great to execute, it’s important to consider a balanced plan across each marketing investment category as your organization matures.

In the early stages of marketing maturity, for example, you might form a plan with equal investments across each category. There are some known areas where you can make quick wins with incremental investments. There are other areas that require larger investments to establish a foundation. And, there are still a lot of available areas for “big swings” that could drive significant marketing impact.

Later in your marketing maturity, more of the effort might switch to incremental investments and away from the other categories. You’ve found substantial incremental opportunity where you can confidently move the needle, the foundation is coming along well, and fewer big swings are necessary to hit plan.

Finally, after a year or two, you might start reaching a plateau or see that incremental investments aren’t going to be sufficient to hit your targets. At this level, more of your plan may focus on big swings like new pricing, new markets or go-to-market models.

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Cae Keys

There are many factors that go into successful marketing planning: understanding the market context, laddering up to business goals, focusing on a few strategic initiatives, budgeting, preparing contingencies, setting milestones and more. Keeping in mind your resource allocation and balancing the types of marketing investments in your overall portfolio can help you drive impact in the short, medium and long term. (test)

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The content herein reflects the views of Summit Partners and is intended for executives and operators considering partnering with Summit Partners. For a complete list of Summit investments, please click here.

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