Almost all businesses go through cycles when times are good, and other times of…PANIC MODE! Perhaps it’s when you lose your biggest customer or have a supply challenge or experience a full-blown recession like in 2008.
When you’re faced with more adversity than you care to have, it’s prudent to spring into action and look at every dollar leaving your organization. It can be tempting to completely strike out the marketing expense because unlike your other expenses, where you receive a good or service, in exchange of your dollars, the marketing expense can be a bit unclear. Which of your marketing is working? Is it working at all?
While it’s true, slicing marketing expenditures from your budget might provide some immediate relief, it also accelerates your downward spiral and could be a death sentence.
Kevin Miller, fractional CMO with Atlas Rose offers his perspective. “We’re not naive about the need to trim expenses relating to marketing if no other option exists. However, rather than eliminating it all, consider taking a deeper dive and operate with a scalpel rather than a chainsaw.”
He’s referring to the many smaller expenses that contribute to the overall marketing engine of a company. “The first thing we want to do is to take care of existing relationships. These are customers that love you and you love them back. Because they are considered promoters, they make repeat purchases and express their satisfaction to others. We don’t want to abandon them. We’ve found that if the situation calls for it, we’ll ask for their continued support during a tough time. If they can push up their timeline for a purchase, or take on more stock, it may just be the lifeline the business needs.”
Next, if you still need to make cuts, cut the general branding dollar but keep your money on direct lead collection marketing.. Your CMO (if you have one) should be able to communicate where the best and most direct ROI channels exist in your marketing plan. It’s not that general branding doesn’t work, it’s just that it’s a longer game and the path to a direct sale isn’t as definitive.
Understand that not spending precious dollars on marketing and advertising does eventually have an effect. It’s the same reason you still see Pepsi and Coca-Cola battle it out even after 100+ years. Even a half percent of market share is worth millions of dollars. If either one of them stopped advertising, it wouldn’t take long for one brand to cede hard-fought market share to the other. Once that momentum is lost, it can be hard to regain.
Miller’s best advice is to slow down. Take a deep breath and work with your marketing team to justify essential expenditures. Making knee-jerk reactions is dangerous. The best moves are calculated and methodical. Once business returns to normal levels, you’ll be able to take more measured risks with your marketing dollars. The extra scrutiny may even have a positive effect on your business and cause sales to increase.
