{"id":9509,"date":"2017-09-04T08:51:31","date_gmt":"2017-09-04T06:51:31","guid":{"rendered":"http:\/\/passodue.flywheelsites.com\/2017\/09\/04\/strategic-budgeting\/"},"modified":"2026-02-26T17:07:49","modified_gmt":"2026-02-26T16:07:49","slug":"strategic-budgeting","status":"publish","type":"post","link":"https:\/\/diariodiunconsulente.it\/en\/2017\/09\/04\/strategic-budgeting\/","title":{"rendered":"Strategic budgeting: the targeted and controlled use of resources"},"content":{"rendered":"<p><span style=\"font-size: 18px;\">by <a href=\"https:\/\/diariodiunconsulente.it\/chi-sono\/\">Alberto Aleo<\/a><\/span><\/p>\n<p><span style=\"font-size: 18px;\">While doing my military service in Italy, I served with the Engineer Corps and throughout training and beyond, we were continually instructed on <strong>how efficiently managing supplies<\/strong>, together with the <strong>targeted and controlled<\/strong> <strong>use of resources<\/strong>, can decide the outcome of a conflict. <span class=\"text-highlight\">There is a whole range of literature illustrating battles won thanks more to an effective procurement strategy than the actual fighting.<\/span> One need only consider siege techniques (or nowadays the use of embargoes), or conflicts waged in hostile territories, such as deserts.<\/span><\/p>\n<p><span style=\"font-size: 18px;\">If we change the context from military crises to the <strong>crisis of the markets<\/strong>, where resources are scarce, the focus will shift to the <strong>management of money and time<\/strong>.<\/span><\/p>\n<hr \/>\n<blockquote><p><span style=\"font-size: 21px;\"><em>In times of crisis companies often make cuts indiscriminately without performing a <strong>strategic analysis<\/strong> that includes a serious investigation of the <em>relationship<\/em> between goals, the resources required, and results.<\/em><\/span><\/p><\/blockquote>\n<hr \/>\n<p><span style=\"font-size: 18px;\">In the more advanced markets there exist professional figures (often from the world of marketing) whose business card refers precisely to \u201c<strong>strategic budgeting<\/strong>\u201d &#8211; or something very similar. <span class=\"text-highlight\">The task of such experts is to study the most efficient use of resources to gain optimum results.<\/span>\u00a0<\/span><\/p>\n<p><span style=\"font-size: 18px;\">On the other hand, in Italy companies still lag behind in this sense, and the result is that when the poor salesperson attempts to present a product or service that could really improve a company\u2019s ability to effectively attack the market, the reply they most commonly hear is: <em>\u201cwe can\u2019t afford it\u201d<\/em>.<\/span><\/p>\n<p><span style=\"font-size: 18px;\">Let\u2019s see <em>how<\/em> and <em>where<\/em> it is possible to <strong>recover investment resources<\/strong>, both to refocus our customers&#8217; attention on the efficiency of their processes and to move beyond this feared objection. Given that my line of work is as a consultant in <strong>marketing and sales<\/strong>, I will consider the processes relating to these two areas, but you may also consider other business sectors.<\/span><\/p>\n<p><span style=\"font-size: 18px;\">Marketing and sales activities have different purposes, but we can summarize them in the following main objectives:<\/span><\/p>\n<ul class=\"check-list\">\n<li><span style=\"font-size: 18px;\">to be <strong>recognizable<\/strong> on the market and to be <strong>easily located<\/strong> by customers;<\/span><\/li>\n<li><span style=\"font-size: 18px;\">to <a href=\"https:\/\/diariodiunconsulente.it\/en\/2016\/10\/17\/new-business\/\" target=\"_blank\" rel=\"noopener noreferrer\">find <strong>new customers<\/strong><\/a>;<\/span><\/li>\n<li><span style=\"font-size: 18px;\">to <a href=\"https:\/\/diariodiunconsulente.it\/en\/2017\/07\/03\/mistakes-after-sales\/\" target=\"_blank\" rel=\"noopener noreferrer\">maintain a <strong>relationship<\/strong><\/a> with customers over time;<\/span><\/li>\n<li><span style=\"font-size: 18px;\">to transform <strong>negotiations<\/strong> into <strong>orders<\/strong>, in the fastest and most efficient way.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 18px;\">Obviously, all these activities are accompanied by costs that we could summarize as follows:<\/span><\/p>\n<ul class=\"check-list\">\n<li><span style=\"font-size: 18px;\"><em>promotion<\/em> costs;<\/span><\/li>\n<li><span style=\"font-size: 18px;\">generation of <em>new contacts<\/em> (or <em>new business<\/em>);<\/span><\/li>\n<li><span style=\"font-size: 18px;\"><em>relationship<\/em> costs (or <a href=\"https:\/\/diariodiunconsulente.it\/en\/2015\/09\/14\/circle-of-trust\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>loyalty<\/strong><\/a>);<\/span><\/li>\n<li><span style=\"font-size: 18px;\"><em>negotiation<\/em> costs.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 18px;\"><span class=\"text-highlight\">The quality and quantity of each of these items depends on the <strong>market<\/strong> in which the Company operates, its <a href=\"https:\/\/diariodiunconsulente.it\/en\/2015\/09\/28\/analysis-of-the-offer-system\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>offer system<\/strong><\/a> and the type of <strong>organization<\/strong>.<\/span>Costs can therefore vary greatly from one environment to another, but whatever the Company, such <strong>expenses<\/strong> must be covered or the enterprise will fail. Some of your customers may argue that by avoiding investments in marketing or <strong>advertising<\/strong> they incur no promotion costs, or even that their customer base is so well consolidated that they do not need further outlay to maintain a stable relationship. But, <em>is it really so?<\/em> Let&#8217;s investigate further\u2026<\/span><\/p>\n<hr \/>\n<blockquote><p><span style=\"font-size: 21px;\"><em>If you have a travelling salesperson, even if this person is in fact the entrepreneur him\/herself, all travelling expenses actually fall under the heading of \u2018<strong>promotion costs<\/strong>\u2019. If you have someone answering the phone when a customer calls, the costs incurred for that member of staff is a \u2018<strong>relationship cost<\/strong>\u2019.<\/em><\/span><\/p><\/blockquote>\n<hr \/>\n<p><span style=\"font-size: 18px;\">What I&#8217;m saying is that <span class=\"text-highlight\">many companies make investments of the type listed above without (almost) realizing it, or worse, <strong>losing sight<\/strong> of the goals\/activities that underlie such investments.<\/span> This <em>\u201cdistraction\u201d<\/em> means they fail to assess the effectiveness of such activities and <strong>miss the opportunity<\/strong> to improve them by releasing resources for new investments.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-17577 size-full\" title=\"Strategic budgeting\" src=\"https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2013\/04\/Gestione-delle-risorse.jpg\" alt=\"Strategic budgeting\" width=\"1920\" height=\"1080\" srcset=\"https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2013\/04\/Gestione-delle-risorse.jpg 1920w, https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2013\/04\/Gestione-delle-risorse-300x169.jpg 300w, https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2013\/04\/Gestione-delle-risorse-1024x576.jpg 1024w, https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2013\/04\/Gestione-delle-risorse-768x432.jpg 768w, https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2013\/04\/Gestione-delle-risorse-1536x864.jpg 1536w\" sizes=\"auto, (max-width: 1920px) 100vw, 1920px\" \/><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 13px;\">Photo by <a href=\"https:\/\/unsplash.com\/@towfiqu999999?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText\">Towfiqu barbhuiya<\/a> on <a href=\"https:\/\/unsplash.com\/s\/photos\/budget?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText\">Unsplash<\/a><\/span><\/p>\n<p><span style=\"font-size: 18px;\">I will give an example by referring to the activity of <em>generating new business contacts<\/em>. Let\u2019s try asking our hypothetical entrepreneur <strong>how much it costs to find new customers<\/strong>. It is a complex but fundamental calculation, which must include the costs of the sales staff and the travelling time and expenses they dedicate to each prospect before the first purchase order is made. Once the <em>\u201cactivation cost\u201d<\/em> has been defined, we can start looking into how it may be reduced. How indeed, as we cannot fire our salespeople or stop them from moving around as required? This is why we need the aid of a budget strategist &#8211; an expert in managing scarce resources. We can <strong>reduce activation costs<\/strong>, for example, through:<\/span><\/p>\n<ul class=\"check-list\">\n<li><span style=\"font-size: 18px;\">more closely targeted activities in the field, through proper <strong>market <em>profiling<\/em><\/strong>;<\/span><\/li>\n<li><span style=\"font-size: 18px;\">the activation of <strong>contact management tools<\/strong> designed to handle the first approach phase and involving salespeople only once prospects have shown interest;<\/span><\/li>\n<li><span style=\"font-size: 18px;\">a more targeted and interactive <strong>communication strategy<\/strong> that enables prospects to select their requirements themselves or to encourage them to initiate the first contact.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 18px;\">These are some of the actions that can be performed, but of course they all involve additional <strong>investments<\/strong>. So, what\u2019s the solution?<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-17579 size-full\" title=\"strategic budgeting\" src=\"https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2013\/04\/Budget-strategia-delle-risorse.jpg\" alt=\"strategic budgeting\" width=\"1024\" height=\"684\" srcset=\"https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2013\/04\/Budget-strategia-delle-risorse.jpg 1024w, https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2013\/04\/Budget-strategia-delle-risorse-300x200.jpg 300w, https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2013\/04\/Budget-strategia-delle-risorse-768x513.jpg 768w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 13px;\">Photo istock<\/span><\/p>\n<h3 style=\"text-align: center;\"><span class=\"s1\"><strong>&#8211; &#8211; &#8211;<\/strong><br \/>\n<\/span><span style=\"font-size: 21px;\">Strategic budgeting is about calculating how much an investment in a new activity or tool may actually <strong>generate savings<\/strong> that equal, or are greater than, the amount invested.<\/span><span class=\"s1\"><br \/>\n<strong>&#8211; &#8211; &#8211;<\/strong><\/span><\/h3>\n<p><span style=\"font-size: 18px;\">It is a matter of budgeting the company&#8217;s strategic activities (in this case the new business) taking into account even the costs most deeply hidden and trying to figure out, item by item, <span class=\"text-highlight\">how much the new investment will repay the initial costs and then generate further savings and increase efficiency.<\/span><\/span><\/p>\n<p><span style=\"font-size: 18px;\">Every good salesperson should understand the basic principles of strategic budgeting, so they will be able to present more than a product or service to their customers, but an actual <strong>Investment plan<\/strong> that places their offer at the core of a project to generate significant economic savings and <strong>improve performance<\/strong>. This is the only way the objection <em>\u201cwe can\u2019t afford it!\u201d<\/em> will transform from an insurmountable hurdle to an opportunity for dialogue and (hopefully) sales.<\/span><\/p>\n<pre>| partem claram semper aspice |<\/pre>\n","protected":false},"excerpt":{"rendered":"<p>by Alberto Aleo While doing my military service in Italy, I served with the Engineer Corps and throughout training and beyond, we were continually instructed on how efficiently managing supplies, together with the targeted and controlled use of resources, can decide the outcome of a conflict. There is a whole range of literature illustrating battles&hellip;<\/p>\n","protected":false},"author":295,"featured_media":9510,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[97,85],"tags":[400,348,349,259,239,247],"class_list":["post-9509","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-best-commercial-management","category-abilities","tag-analysis-en","tag-budget-en","tag-management-en","tag-offer","tag-sales","tag-strategy","entry","has-media"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v15.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Strategic Budgeting in Sales and Marketing - 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Nel 2011 ho fondato insieme a mia moglie Alice lo studio di consulenza e formazione Passodue il che mi ha permesso di poter mettere a disposizione dei clienti un bagaglio di esperienze e conoscenze molto vario, che spazia dall\\u2019economia, al marketing, alla gestione di reti commerciali.\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/diariodiunconsulente.it\/wp-content\/uploads\/2020\/12\/pexels-photo-353644-1.jpeg","_links":{"self":[{"href":"https:\/\/diariodiunconsulente.it\/en\/wp-json\/wp\/v2\/posts\/9509","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/diariodiunconsulente.it\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/diariodiunconsulente.it\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/diariodiunconsulente.it\/en\/wp-json\/wp\/v2\/users\/295"}],"replies":[{"embeddable":true,"href":"https:\/\/diariodiunconsulente.it\/en\/wp-json\/wp\/v2\/comments?post=9509"}],"version-history":[{"count":0,"href":"https:\/\/diariodiunconsulente.it\/en\/wp-json\/wp\/v2\/posts\/9509\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/diariodiunconsulente.it\/en\/wp-json\/wp\/v2\/media\/9510"}],"wp:attachment":[{"href":"https:\/\/diariodiunconsulente.it\/en\/wp-json\/wp\/v2\/media?parent=9509"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/diariodiunconsulente.it\/en\/wp-json\/wp\/v2\/categories?post=9509"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/diariodiunconsulente.it\/en\/wp-json\/wp\/v2\/tags?post=9509"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}