Should I reduce my marketing budget or “Keep the Faith”?

Managing a business’s finances and cash flow can be complex. Considering whether to reduce your marketing spend is also an intricate decision. Never is it more so than when prices are rising, inflation is high, recruitment is challenging, and the general economy is unstable.

Recessions and economic instability come and go; and riding the storm is delicate.

There has been an assortment of comments in the media recently regarding the campaign by the Government, which is set to ask companies to reduce their marketing budget. The intention is to sacrifice marketing effort to decrease prices for consumers.

It has incensed many marketing professionals and industry bodies that this is the stance recommended to businesses by Government. The FSB and CIM have lobbied the Government to articulate their thoughts on the campaign and how damaging this is to the marketing industry, and more importantly to the future of businesses if this approach is adopted without some very careful consideration.

We mustn’t forget that marketing is not just about spending money. It works in association with many aspects of business. Here are my top five considerations:

1.      Recruitment

Whilst businesses can be fortunate and can keep long serving employees, staff churn is inevitable, never more so than at present with recruitment being so difficult. So, the marketing role in assisting the HR function is to keep the business image constant and positive, maintaining  company positioning at a level that attracts the right quality of candidate. This is crucial.  Read the blog Why Marketing and HR should work together for more insights.

2.      Creating awareness

It’s simple logic — you can’t make a sale if no one knows about your products or services. Without being present to your target audience how do they know that you exist? Whether you are a restaurant needing to share information about new menus, promotions, a reminder of opening hours; or a garage reminding car owners that they need to service their vehicle, constantly communicating to your customers and target audience is vital.

3.      Building reputation

As a business owner or director, you are likely to understand how important your reputation is to the  success of your business. It can be the deciding factor in whether a customer chooses to reach out to you or chooses one of your competitors. Because marketing spreads the word about your business, it’s a major factor in the reputation your business takes on in the wider arena. Strong, professional marketing indicates that you’re a reputable business. The connection is irrefutable.

“Repetition makes reputation, and reputation makes customers.” Elizabeth Arden

 4.      Engaging Customers

It’s important for your business to engage its customers. Marketing is a tool to keep the conversation going. Engaging customers is different from pushing your products and services. Correct engagement involves providing your customers with relevant information about your products and your business. It’s all about creating fresh, regular content.

5.      Growing the business

Whilst marketing participates in running campaigns, increasing awareness and managing the company’s marketing collateral, ultimately marketing is about generating enquiries and converting them to sales.

Simply put, if you stop marketing, you also stop generating sales.

Some helpful considerations

Every business needs to look at its costs on a regular basis, no more so than now, but as a marketing professional I would urge you to consider the following before contemplating any cuts in your marketing budget:

  • What impact would it have on your future pipeline?
  • What impact would it have on your current marketing staff?
  • What impact would it have on your medium to long term goals?
  • How would it affect the reputation of the business if you were no longer “present” in your business space?
  • Would your competitors steal a march on you and take away your market share?
  • Would your recruitment become more difficult and staff churn challenges increase?
  • Tracking back on your marketing metrics (and if you don’t track them, start now!), how will this affect profitability?
  • Consider the fact that strong marketing during an economic downturn is often more effective in maintaining presence and profile.

And finally

Whilst overheads are mostly unchangeable in your financial forecast, we know that training and marketing are an easy target for reduction. The famous research from Binet & Field showed that if you halve your branding activity then it will take you THREE years to recover. Stop it altogether and you’ll feel the impact for FIVE years. To be clear, that’s FIVE years to get back to where you left off. It also takes longer to recover when times start to improve.

So, as the line in the Bon Jovi song says, “You know you’re gonna live through the rain” and my recommendation, as the song title says, is “Keep the Faith.”

If anyone would like to discuss their marketing budget or any marketing activity with a marketing professional of over 30 years plus experience, then please do get in touch. 



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