The cost of doing business is increasing across the board. More and more as business owners, we see earned revenue leaving our business to cover rents, employment costs, energy bills and supply chain issues.
Sales may also be off-target as our customers tighten their budgets.
Naturally, businesses look to cut costs as much as possible when this happens. It’s an understandable move to ensure the company remains profitable.
However, it is my experience that in many cases, Marketing is usually the first area to be cut – and sometimes quite substantially.
Indeed, many business owners will elect to STOP their marketing altogether.
There are many reasons why this is a bad idea, but for this Blog, I will focus on three primary areas.
3 Reasons Why Not to Stop Marketing in a Downturn
1. Short-term gains, long-term losses
While you may see an immediate financial benefit to cutting your marketing costs, it can result in a loss of share-of-mind in the broader marketplace.
Markets are fickle – if you’re not “out there”, there is every chance the market will forget you. Buyers might assume you’ve gone out of business, while existing clients will worry when they don’t see or hear from you. They may question whether they should renew contracts or go to a “stronger looking” competitor.
Once there is doubt in an existing or potential client’s mind, it is tough to bounce back.
2. What if your competition doesn’t change its approach?
If your competition is still actively promoting themselves, they are showing the market they are open for business.
I learned a phrase early on in my marketing career that has always stuck with me. “Perception is reality”. It won’t matter if competitors are inferior to you. As far as the market is concerned, it is their message that is heard.
As we saw during the pandemic, buyers will always find what they need. Loyalty is not a given in difficult times – it’s a “nice to have”. If you disappear off your potential customers’ radar or even lose touch with your existing clients, they will most certainly look for alternatives to fulfil their needs
3. Your business goals will be affected
When you set your goals in January, you defined your revenue and customer acquisition targets for the year. Your marketing would have played a vital role throughout the year in supporting you reach those goals.
But, with marketing activities no longer in the mix, what impact will that have on achieving those goals, and what will the overall effect on the business be?
But let’s be honest. When you need to make savings, what can be done to ensure you remain top of mind with your clients and prospects?
Move to Smarter Marketing!
5 Tips to Move to Smarter Marketing
“Your business context is and will remain uncertain. But if you get moving now, you can ride the waves of uncertainty instead of being overpowered by them“. Author unknown
I have compiled five easy-to-follow steps that will allow you to see cost-saving potential while ensuring your marketing is working hard for you!
1. Revise your goals and budgets
A lot has changed since the beginning of the year. So, your first task is to get a clear picture of where your business stands. Once you understand this, you can see what adjustments, rather than cuts, can be made.
- Check your revenue targets versus actual revenue and your client acquisition targets versus actual client numbers. How has the business performed year-to-date?
- What are your Average Order Values (AOVs) like at the moment?
- Should you consider shifting sales priorities? For example, might you focus on selling a lower number of higher-margin goods or services; or, conversely, look to sell more lower-margin goods or services?
Now that you have answered these questions, the next step is to look at your revised marketing budget. Considering everything, how much can you afford to allocate towards it?
2. Review all marketing activities
This is where we look at what’s working and what’s not. Start by making a list of all the activities you are currently doing. Once you have that list, look at your return on investment (ROI) for each activity, i.e. how much you invested versus the results achieved.
However, keep in mind that while everything will have a monetary ROI, some activities will achieve “more than money can buy”. For example, suppose you sponsor a local kids’ football team. In that case, the monetary contribution may only be a couple of hundred euros. Still, the broader gain is loyalty amongst all those parents and the wider community.
Once you have assessed which activities are performing well, you want to scrutinise each channel you use. Where are your leads coming from? This will give you a good indication of where to focus your activities and budget.
3. What are your buyers looking for?
Good marketing is all about adapting to the situation. Pivoting when something isn’t working; moving direction to provide what is required. For example, if external pressures, such as the economic downturn, force your customers to behave differently and seek solutions to new problems, then as a business, your marketing needs to reflect that change.
Considering your Bulls Eye Customer, what are they looking for?
- Do they want dependability – are supply chain issues a concern?
- Are they looking for a price cut?
- Are they looking for something that will help them in the long run?
- Automated processes
- Sustainability
Ultimately, it’s about making your customers’ lives easier.
4. Is your messaging still relevant?
After looking more into what your customers are looking for, the next step is to review your messaging.
Is your messaging up-to-date? Are you providing your clients with a clear solution for today’s problems – not the problems they may have had several months ago?
Once you align your messaging with your customer’s needs, you ensure that you make the most out of your advertising, content, and outbound marketing channels. If you can provide something faster, cheaper or of better value – shout about it!
5. Retention & Funnel
The next areas to look at are your existing client base and sales funnel.
Let’s start by looking at your existing clients. You may have heard the adage that converting a new customer is seven times more expensive than selling to an existing one.
Considering your client base, are there any cross-sell or up-sell opportunities you can take advantage of?
What could nurturing activities contribute to safeguarding contract renewals?
Harvard Business School points out that ‘it’s more important than ever to remember that loyal customers are the primary, enduring source of cash flow and organic growth. Marketing isn’t optional—it’s a “good cost,” essential to bringing in revenues from these key customers and others.’
Next, look at your marketing funnel. With mere weeks left in the year, you might best focus on giving those “hot prospects” the gentle nudge they need to convert by year-end.
Conclusion
I hope these points have changed your mind about slashing your marketing costs. After all, to quote Steuart Henderson Britt – lecturer and marketing guru, ‘Doing business without marketing is like winking at a girl in the dark. You know what you’re doing, but nobody else does.’
If you would like to talk to me about moving to Smarter Marketing, please give me a call. I’d love to chat with you!
Drop me an email at Lissa@dynamicmarketing.ie
And be sure to check out my website for more insights into the beautiful world of B2B marketing!