Vantage Point: Ideas and advice to improve your marketing

Go Ahead and Cut Marketing Budgets—But Avoid the Jugular!

Becky Gauerke, Marketing & PR Executive

Revenues are down or flat … You’re missing your numbers… Profitability is eroding … Investors are getting nervous. You’ve pushed the sales team as hard as you can—first with incentives, then with threats—but the business just isn’t there and your new product pipeline is delayed. It’s time to accept reality. And adjust your expenditures.

So, where do you start? If you’re like many executives, you find out who’s doing the spending. And what do you know—the marketing budget is a whopping 9 percent of revenues! What are they doing with all that money, anyway?

Sound familiar? Let’s face it: much of what marketing does is considered “fluff.” So it’s not surprising that in many companies, marketing is the first expenditure affected by a major cutback. Even when budget cuts are spread across several areas, marketing is often handed a disproportionately large percentage of the pain.

However, when you’re focused on reducing expenses, you can’t afford to lose your focus on your customers. And marketing is one of the few functions in your company that really puts your customers first.

“Sure,” you’re saying to yourself. “What else would a marketing firm say?” But think about it. Remember the direct marketing program that uncovered 10 new leads? The market research study that revealed untapped opportunities for a new product? The cross-marketing effort that boosted sales of new services to existing customers? The beefed-up website that shortened your sales cycle by two months? These results aren’t “fluff”. They are valuable business initiatives that drive revenues, differentiate your company in the marketplace, and ensure retention and loyalty among your existing customer base. That’s the value of marketing—and when sales are slipping, you need all you can get.

That doesn’t mean you should take a “hands-off” approach to marketing when it comes time to handing out pink slips. But be careful not to slash bottom-line programs that will negatively impact your top-line revenues. Here are a few general guidelines to keep in mind:

What to cut	What to keep
Extraneous sales tools — do you really need another case study to add to the 20 you already have?	Lead generation — sales needs help! You may even want to increase your investment here.
Events/conferences that you go to “because we’ve always been there.”	Events/conferences that generate leads — both from prospects and existing customers.
Corporate/brand advertising — unless your very reputation is at risk.	Customer loyalty programs — if your competition smells blood in the water, they’ll be trying to steal your customers; an investment here can keep them in the fold.
Media relations — Consider putting your more aggressive, proactive programs on hold; but try to keep a steady stream of news flowing, You don’t want to disappear entirely from the radar during a downturn.	Analyst and investor relations — it’s tempting, but going quiet now will only make things worse, both now and in the long run.
	Internal communications — employees need to hear from you now more than ever.

Upcoming VantagePoints

To Blog or Not to Blog (May)
Top 7 Lead Gen Tactics (June)