If you’re part of a business or organization that’s been around a very long time (or even existed during the great recession of 2007-2009), you’ve likely experienced a rough financial patch or two. Most organizations can handle a little ebb and flow, but when revenue falls short of the target for too long, tough decisions sometimes have to be made. And while sometimes it’s necessary to analyze your costs and look for places to spend less, deciding what’s necessary and what’s not can be tricky. Here are some things to consider before you think about cutting your marketing budget or activities.
Can You Make Sales without Marketing?
Just like the old chicken and egg paradox, this is probably one of the stickiest points when deciding whether to cut back on your marketing. On one hand, you need the sales, leads, jobs, and customers more than ever to make money. On the other hand, coming up with the budget for marketing might feel like squeezing blood from a turnip if things are really tight.
Do you know where most of your leads or sales come from now? If you pull the gas off of those channels, will your sales continue? There is a question here of how many people will find you if you’re not actively marketing (or marketing less). If your current search engine optimization (SEO) game is on-point, or if you’re a household name with a ton of brand equity, you might feel pretty certain that people who need what you offer will find you regardless. But for lesser-known brands, or those that perform poorly in online search, you might fail to connect with potential customers. This is especially true for new customers–those that don’t already know you. How much of your business comes from current customers vs. new? Can you afford to lose out on potential new customers?
Will Your Competitors Cut Back on their Marketing?
It’s not always appropriate (or effective) to keep up with the Jones’ when it comes to marketing budget or tactics, but certainly the strategy of your competitors needs to play a factor in your planning. Depending on how competitive your market is, decreasing or dropping your presence could have devastating effects on your brand if you have aggressive competitors. Leaving a gap could allow your competitors to take market share from you during a vulnerable time, which could prove difficult to recover in the future.
What Long-Standing Effect will a Decrease Have in Future Marketing Effectiveness?
Solid branding and marketing effectiveness is rarely something that happens overnight. Rather, your brand strength (for many) is typically developed over time. For many years, we’ve known that repetition is a key component to having people remember your message and get them to act on it. Many say the magic number is seven times. A few even suggest that number to be higher. In either case, you can see how decreasing your presence might harm the effectiveness of the messages you do put out–today, and in the future when you try to ramp back up. Additionally, the more we market, the better we tend to get at it in terms of effectiveness. Every execution is a chance to learn what works, what doesn’t, and how to continuously improve. But if you’re not trying, you’re not learning either (or putting past lessons to good use).
Building a solid foundation for your brand helps you weather these types of financial storms better. There are even studies such as the one from McGraw-Hill back in the 1980’s that showed companies who increased their spending during the downtime fared much better during and in the years after the recession. What will your trajectory in the coming years look like without sufficient marketing push?
Something’s Gotta Give
Understandably, sometimes you just don’t have the available funds to continue as-is, even if you’d like to. When you’re in this situation, taking a more surgical approach with cuts to marketing rather than a “slash and burn” can help you find a way to a sustainable marketing plan for the short term:
- Cut back or eliminate things that don’t perform well. Now is the time to have great data regarding what channels contribute most to your sales! If there are areas that don’t produce quality leads or sales, these are often the easiest to cut first.
- Refine your targeting to concentrate budget only on audiences most likely to produce results. Most companies know who their key target customers are, but are likely also prospecting a bit more widely. Narrowing those targets to the best potentials can help you make the most of a smaller budget.
- Shift from brand awareness to action. You want to be known, but you need people to take action right now. Be sure your efforts are aimed at producing something of value for you right now and/or in the near future (ie, lead info, a sale, donations, etc.)
- Have a lead nurturing process in place. If people are unsure, they may not be pulling the trigger the first time they visit. Get that lead info and then have a nurturing process in place to help move that person forward to a customer.
- Shift your mix. If you’ve heavily invested in traditional media forms that are more expensive for example, now might be a good time to put a portion of those funds into less costly options such as digital channels for the time being. The cost for one billboard campaign could correlate to multiple email and social media campaigns for example and allow you to stretch dollars further. Pull budget from less effective areas and double down on those that work best for your business.
If you’re feeling the crunch and aren’t sure what to do, give us a call. We love helping businesses and organizations find ways to be successful, even in challenging times. You can choose your own time and set up a Zoom call right now!