3 Ways to Cut Marketing Costs and Still Have a Robust Strategy
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Not since Sam and Diane, Rachel and Ross or Jim and Pam has there been this much “will it or won’t it” fuss. I’m talking about the recession, of course. Even The Wall Street Journal isn’t quite sure whether we’re in it, we’re heading toward it or we’re going to miss it by inches. Yes, we’re seeing higher interest rates and inflation — yet the argument continues over whether or not this is one for the record books.
But the answer doesn’t really matter. Now is the time for recession planning, even if this particular recession doesn’t come. Planning helps you not only weather the bumpy economics of a full-fledged recession but also have a master playbook when your marketing budget gets trimmed.
To be honest, times aren’t looking good for next year’s budgets. In response to a CFO survey conducted by Gartner in May 2022, 39% of respondents said they’d be cutting costs if inflation persisted and the last quarter of 2022 looked bad — which it was. And CFOs aren’t the only ones taking proactive measures. Top companies including Google, Goldman Sachs and Wayfair recently announced hiring slowdowns and job cuts, with Google laying off about 12,000 workers Jan. 20.
What about marketing, though? Are marketing teams destined to do more with less in 2023 and perhaps beyond? It seems that way. More than 4 in 10 marketers told Deloitte they were slashing their spending due to inflationary pressures. This isn’t shocking news. Marketing initiatives often feel the pain first, particularly when the word “recession” gets thrown around. But that’s a mistake that can befall a company.
Without marketing, it’s nearly impossible to generate new business. Certainly, cuts can be made. However, they must be made strategically so the organization can succeed — and maybe even thrive — during downturns.
As a retrospective piece from Harvard Business Review on three previous global recessions concluded, the 9% of companies that flourished shared a commonality: All of the survivors were able to find the sweet spot between tightening up their marketing dollars and knowing where and when to invest in marketing tactics.
What are some ways your company can recession-proof your business through effective marketing strategies?
Related: It’s Easy to Cut Your Marketing Budget in a Rocky Economy — But That’s a Bad Idea. Here’s How to Save Money on Your PR Strategy.
1. Conduct a marketing strategy audit
Recession planning starts with understanding how fragile your marketing strategy is. Specifically, which marketing strategies would stop working the moment you stopped fueling them with cash and which ones would still give you leads for a couple of months?
Let’s say you’re spending $10,000 every month on pay-per-click and getting 100 leads in return. The moment you turn off your PPC campaigns, you’ll lose 100 leads. However, you might also be spending $4,000 to pay a company to handle your SEO and get you to the first page of Google for a handful of keywords. If you stop working with that vendor, you won’t see a drop-off in search engine page rank immediately (though it will likely come eventually).
This exercise helps you see the consequences of cutting marketing costs in various places. It’s a good way to consider the long-term implications of every decision rather than just cutting 5%, 10% or 20% across the board. Evaluating the snowball effect of reducing funds for each marketing effort today can help you avoid disastrous outcomes later.
Related: Worried About a Recession? Do This to Prepare Your Company.
2. Double down on low-spend, high-reward strategies
After your team has conducted an audit, look closer at the data. Which strategies offer the highest ROI for your spending? These are the places to double down when you’re strapped for cash but want the leads to keep flowing into your pipeline. Investing in the areas that are working best essentially builds a safety moat around your brand.
Recently, an article from The Wall Street Journal explained that luxury goods marketers are using this tactic. Case in point: One wine retailer is indeed putting more money into marketing, but only for select wines above a price threshold. This is the same principle of finding the highest rewards you can through a thorough understanding of what’s driving the most revenue for your organization.
Maybe when you look at your marketing strategy, you’ll discover that your inbound funnel is the most anti-fragile part. Each month, you only have to publish one guest-contributed article, six blog posts, one email newsletter and one gated whitepaper and drip campaign. In exchange for these low-cost tactics, you get a consistent, predictable ROI. Plus, you have content assets that can be reused and repurposed, saving you even more.
Related: Why a Recession Is the Worst Time to Skimp on Brand Marketing
3. Step up when your competitors step back
You’re not the only brand figuring out how marketing during a downturn works. Your competitors are, too — and you can bet your budget they’re going to make mistakes and leave wide-open gaps for you to walk through.
Make a point to watch and evaluate your competitors’ moves. Perhaps a big competitor used to offer regular webinars but stopped or slowed down. Make a note and explore the possibility of adding webinars into your strategy to fill the void for interested audiences. Don’t immediately assume that webinars can’t work just because your competition nixed theirs. Many organizations make knee-jerk moves when uncertainty looms.
Your job is to get to know your customers or clients well enough to see what they still need. Will their buying habits change during a downturn? Absolutely. But the more you understand how your target market has been impacted, the easier it will be to adapt your marketing and messaging to be available when your competitors won’t or can’t.
Some businesses won’t survive whether we have a recession or not. The calculated recession-planning maneuvers you make today can help your brand come out stronger even if your marketing budget undergoes a serious shave.