You need to reduce your costs, where do you look first?
Many companies look at reducing marketing spend. They see a figure and think, “ah well that is a nice bit of money there, let’s cut that.” These are companies that see marketing as a cost centre. See marketing as something that is a nice add on in the good times, when they can afford it, but they don’t see marketing for what marketing truly is. They have probably never measured the effectiveness of a campaign, never tracked the number of leads, the number converted the value of those conversion. Instead marketing is seen as the colouring pens and pretty picture guys.
In the scenario above, I’d agree, you don’t need colouring pens and pretty pictures, BUT when in a recession (and let’s face it Covid is causing a recession), then if used effectively marketing is a resource to drive the company forward.
What do I mean by that? Well marketing is not just about putting enquiries into the top of a funnel, it is about helping to move those enquiries through the funnel, maximising conversions to sale, and keeping a customer so that the lifetime value of a customer is increased.
It is about ensuring that you have the right product / service in the right place targeted to the ideal customers, at the right price point for them and for you. For ensuring that processes are in place so that the customer experience is as positive as it can be.
When done correctly marketing isn’t an add on to a business, it is the driving force of a business, a major resource centre. So, is it wise to reduce the budget of the engine of a company? The department that can help drive the company forwards again?
Much research shows that those companies that invest in marketing in a downturn, don’t fall as far as their competitors and come out of the downturn earlier and stronger than their competitors allowing the gain of market share. Indeed, in the financial crisis just over a decade ago, I was working in a company which still invested in marketing – yes, sales dropped 20% but the market dropped 40%! Was it painful? Yes, but not as painful as it could have been. Did we come out of the recession earlier – yes! Did we gain market share? Absolutely, plus the trust, thanks and loyalty of channel partners and customers for helping them be successful. The ramifications of doing marketing correctly during that downturn lasted far longer than the downturn did.