There could be several reasons why businesses look at what they spend on marketing. And it’s often when revenues and profits are declining or flatlining that owners start to take the chainsaw to their budgets. But is this the right approach?
The case for marketing in the tough times
There’s plenty of evidence that many businesses fail to establish a strategy that includes some goals and objectives for their marketing activities. This results in an ad hoc spray-and-pray marketing approach. In truth, this is akin to flushing $100 bills down the Royal Doulton.
When the going gets tough, reviewing your marketing budget is not only smart, it’s crucial. Moreover, you should consider putting some KPIs in place. Marketing, like other business expenses, needs to be analysed.
The case against
When you think hard about it, the objective of marketing is to make money for a business. So, slashing your budget for it in the tough times usually makes little sense. In truth, marketing aims to expand your business and there are plenty of studies and white papers that demonstrate skilled marketing drives fruitful sales. Few flourishing businesses have achieved their winning track records by cutting their marketing budgets.
Rather, savvy businesses seek to change their approach to marketing when their business environments change. Doing more of the same is usually foolhardy, and in challenging times, using your marketing dollars more sagaciously is usually a sound approach.
Taking the razor blades to your marketing has several knock-on effects that you may not have considered. For instance, it may damage staff confidence and morale, especially for those in sales-related roles.
Also, a marketing vacuum can give your competitors a free hit, if it leaves the impression that you’ve given up. Consumers move quickly these days. In the age of the informed consumer, markets are moving and disrupting faster than ever before. If you’re not engaging your potential and existing clients, then chances are someone else will!
Never simply slash and burn
As an owner of a marketing and communication business, I expect some will suggest self-interest is a factor in my advice. So, I asked my client Angus Raine, executive chairman at Raine Horne, for his views on the value of marketing in tough times. Raine, who has worked through plenty of property market highs and lows over the last 30 years said: “When market conditions get tough, this is the time to spend more resources on marketing. These days, there are so many marketing channels available to businesses, whether it’s public relations, digital marketing or more conventional methods. The bottom line, is that you must have a plan before launching into any marketing activities.”
A plan for troubled times
When developing a marketing plan, aim to be creative, and consider how your clients want to engage with your business. If you’re concerned, or need to trim costs, look at those activities that are failing to generate leads. Analysing your program will show you what’s working and what is bombing. Once you have this research, focus more on the successful activities to bring leads to your sales pipeline.
At the same time, lop away inefficient marketing activities and redirect the money into channels that are cutting through to customers. Clever marketing is planned, will have goals, and is well-informed. If you get your planning right, no matter how challenging the business environment might seem, chances are your marketing will contribute to add growth.
Raine, who oversees a real-estate network of 300 offices in Australia and worldwide has a favourite mantra: “You can’t sell a secret.” It’s worth remembering his refrain the next time you’re considering taking the hatchet to your marketing budget.
