Many of us experience ups and downs in the economic conditions, business cycles and our careers. The times we are facing right now are no different. No doubt, many marketers will also admit that the marketing budget is one of the first things being cut in times of hardship. But is this the right thing to do? Not in my opinion.
Marketing in its primary function, is supposed to create awareness, interest, and ultimately, sales leads for the business. Many organisations can’t see the impact marketing makes, as it is often something that happens almost unnoticeably, in the background of other business operations. It is even sometimes considered to be a bit of an indulgence to have a marketing team, activities or campaigns. So it is not a surprise that when times are hard, and bosses are looking for savings, more often that not, they will arrive at the marketing doors. And as much as cutting the marketing budget might be an easy decision, it may carry significant consequences in the future. So before you make that decision consider this:
The direct results
Diminished brand awareness
Your brand is your value. A strong brand that is recognised in the market and synonymous with quality, service or an excellent product has an immeasurable value. Brand awareness is built over time, and it is something that needs to be continuously maintained. Especially nowadays when the competition is so fierce in practically every industry. So, when you decide to cut the marketing budget, your visibility in the market may suffer. Less marketing spend may mean less press advertising and smaller physical presence at events and trade shows. You may create a void that some other company will fill, making it difficult for your organisation to get back into the space you were occupying previously.
Smaller digital footprint.
I think it is undeniable that digital presence is paramount in today’s reality, especially now, when we are often asked to work from home and have limited physical contact with other people or businesses. Recently our life has been conducted online, and so has our business. So, if you cut your spending in digital promotions, you might become “invisible”. By cutting spending, I mean any online paid advertising, e.g. PPC, social adverts, Google promotion. But also a reduction in resources, if the person who took care of your digital activities is not doing it anymore, you are taking a risk.
The lucrative spot on the first page of Google, all of a sudden might be unattainable and your potential customer may never find you. Your social media presence may diminish and with that, your social interaction.
All the work you have put into building your social profiles and engaging with various audiences might be lost due to lack of activity.
Indirect results
Lost opportunities
Just as much as you are considering the marketing budget cut, so are many other businesses. The chances are that many of them will decide to reduce the spending and free up some promotional space. Maybe your strongest competitor is reducing their marketing footprint and therefore, creating a space which your company may be able to claim. Some of your competitors’ customers may migrate to you only thanks to the fact that you are present in the market and they are not. But if you are cutting down marketing activities at the same time, then you are losing the opportunity to claim the promotional space made by others.
Longer recovery time
It is much harder to recover the marketing presence and build brand awareness after you allowed it to lapse. The effort and cost that needs to go into rebuilding a good market position quite often will be greater than the cost of maintaining that position throughout the crisis. This especially affects smaller organisations, whose marketing presence might be at the early stages of development. So, if you only recently started looking and investing in marketing, don’t lose the momentum. It will take much longer to get back to the same position when the economic situation improves, as you will be fighting for the same spot as many other companies. The competition will be higher, and it will be harder to gain traction within the market. On the contrary, if you maintain your presence at a stable level, by the time things get better, your position will be ahead of others, well established and visible within your industry.
Don’t worry it’s not all lost.
Ok, so you decided to cut marketing cost, and now you are reconsidering. Great news! It is not too late! With smart cost management, focus on the most impactful activities and a solid marketing plan, you can still reduce the cost and maintain your marketing presence. It is all about making the right choices and spending money where you can get the best return on investment (ROI). Some marketing activities can be very cheap and can bring excellent results. So if you need any help in identifying these, contact me and I am sure I can help.