Rethink, resist, refocus! Maximizing your marketing budget in tough economic times
In uncertain times having control of your budget is essential. Even as organisations tighten their belts, investing in marketing remains good practice.
The economic storm is upon us. As marketers, we must be prepared for challenges to our budgets. It’s easy to give in and let your marketing budget be cut back to the bare minimum, with a reduction in headcount and spending. However, marketers shouldn’t be afraid to make the case to future-proof their business, even in difficult times.
Investment may not seem the obvious answer to budgetary threats but being in control and having a clear strategy for marketing efficiency will reap rewards as markets change and recession looms. In the words of Sam Walton, founder of Walmart, when asked about a recession, “I thought about it. I do not wish to participate.” A bold statement, especially when customers and markets are jittery. That view is shared by many strategists that believe you have to drive harder in a recession and invest more heavily in marketing – words that marketers warmly receive.
It’s important to be pragmatic in your approach. As well as understanding your customers’ mindset, an audit of your martech stack is needed. Are you being efficient with your tools and platforms? How much time do you and your team spend finding and moving content instead of delivering campaigns? We’ll come on to this later, but back to basics for now by applying the 3Rs: Rethink, resist, refocus.
Rethink customer attitudes
Be on the customer’s side and walk a mile in their shoes. Having a firm understanding of your customers will undoubtedly appraise you of their pain points. Harvard Business School experts John Quelch and Katherine Jocz published a useful article, ‘How to Market in a Downturn’, which proposes four types of mindsets among customers during an economic crisis.
- The slam-on-the-brakes customer: This group fears the worst and pre-emptively cuts spending and postpones all decisions indefinitely
- Pained but patient: This customer group worries and may economize in the short term. However, they remain optimistic about the future. If the economic situation changes for the worse, they’ll slam on the brakes pretty fast.
- Comfortably well-off: This group continues business as usual but is less conspicuous and more selective about what they do
- Live-for-today: This group won’t change their habits unless they become unemployed.
In the world of B2B, it’s hard to envisage the fourth laissez-faire category, apart from early start-ups who can go full pelt to get to scale-up status and larger funding rounds. From experience, some sectors will cope with the ups and downs of an economic downturn, but this will depend on where you operate – public services are facing a significant funding challenge as governments try to counter rising costs such as energy and borrowing.
I challenge you. Apply the four categories above to your customers. Who fits in what group, and what will their future needs look like? Then, how to adapt your campaigns, messaging, and tactics accordingly?
Resist the marketing budget cut.
Fight the inevitable cuts proposed to ‘soft’ marketing and advertising budgets.
History dictates, CFOs often look at these as the easiest to cut first. But it’s counter-intuitive in the long term, according to research into the global financial crash in 2008.
“Two-thirds of losses in incremental sales during the last recession were driven by lower investment in media, not because brands’ ROI was declining. And on average, brands that reduced media investment suffered an 18% loss in incremental sales. However, the brands that maintained or increased their media investment during the recession came out stronger – in both the short and long term – and saw a 17% growth in incremental sales and ROI.”
There was a pay-off for brands that maintained or increased media spending during the financial crisis, while others were cutting back because of the relative increase in the share of voice and exposure. Long term, the brands that cut back will have to invest in reclaiming their lost visibility. Research published in Harvard Business Review into the performance of UK consumer goods brand Reckitt Benckiser following the 2008 crash found:
“Increasing its advertising outlays by 25% in the face of reduced marketing by competitors, Reckitt Benckiser grew revenues by 8% and profits by 14%, when most of its rivals were reporting profit declines of 10% or more. As a result, they viewed advertising as an investment rather than an expense.”
Marketers take note: The “obvious” marketing budget cut may not be the wisest.
Refocus on your martech stack to be more productive
Inefficiency is painful. Not only does it slow you down, but it costs money too. Whether this is shared folders across multiple servers and cloud storage services, website content management systems, or challenging workflow systems, your time is better spent elsewhere. However, there are some simple rules I advocate
- Bite the bullet and have a single point of truth in your business
As a marketer, you want to add value to your organization and help the company respond to the rapid pace of change. You certainly don’t want to spend hours trawling through multiple versions of files. Equally, you don’t want to approve invoices for work identical to the master campaign materials you invested marketing budget and time into. So have a zero-tolerance approach to file storage – a single location where all assets are stored. Ensure you have version control set up, too – that way, you can ensure an audit trail.
- Keep the workflow simple.
Convoluted approval mechanisms slow campaign delivery and allow room for error when files are shared by email, links, and team messaging apps. Comments and amends end up in email chains or chats without being linked to the asset in question. This is even more important when we are now working across time zones, often hybrid or remote. We can all recall the Teams or Zoom chats and calls when you’re trying to find a file on SharePoint or a cloud drive and trawling through lengthy email trails to ensure all comments and changes are included. A single platform can help by ensuring that amends and approvals are captured in one place and linked to the specific asset or campaign materials. Time saved and headaches reduced.
- Make your assets work harder.
When economic times are tougher, your marketing budget and hours need to work harder. But what about the terabytes of assets you have saved from previous times? Could they be reused? Too often, assets are forgotten or archived once a campaign is completed. You can bring these back into the light and repurpose them. Recycle, reuse and repurpose should be the mantra of marketers – not just in the lean times. Make your investments into assets work harder.
- Finally, get everyone on board.
Another route to making your marketing department work more efficiently is to empower users – both your internal team members and your external partners. Unfortunately, rights access and user management challenges can mean marketing assets are siloed. This, in turn, means assets become shared – potentially incorrectly – outside your ecosystem.
By providing a straightforward user access process, you can allow more of your organization access to materials while maintaining control and auditing its use. Sales teams aren’t, therefore, requesting a last-minute asset ahead of their customer presentation that morning. Likewise, associated colleagues and partners such as design agencies and freelancers can access assets without requiring complex security logins and clearances. Nor will you have to attempt to circumnavigate any IT barriers in your organization to work at your most productive.
Maximizing your marketing budget: Don’t wait until it’s too late
Rethink, resist and refocus are all about thinking differently. Something marketers do brilliantly. It’s in our DNA – to accept the challenge and seek solutions. It’s too easy to hunker down and wait for the storm to pass while doing less of everything. Customers will remember if you were there for them during these uncertain times.
By combining talented people, with the right tools and content in the same place, you create the right environment for your teams to be creative and deliver solid campaigns that resonate with your audiences.
Future-proof your business by making smart investments in marketing.