Faced With Marketing Budget Cuts? Here’s What To Do
MindTree Blog ArchivesHow many of you have been asked to cut your marketing budget in the last 12 months? Or maybe the question should be “how many times?” Many peers I have talked to are on their 2nd or 3rd round of budget cuts since 2009, whether in the form of staff reduction or monetary cuts. Meanwhile, many of those same executives I’ve spoken to say sales expenses have remained steady; or have reported an increase in the number of sales resources.
The purpose of this blog is not to complain or lament our bad fortune as marketers. I feel there are many of us that are taking the opportunity to make smart choices and consequently becoming more efficient with our marketing strategies.
Select Targeted over Reach. To survive, marketers need to move away from marketing activities that are focused on very broad market segments to those that are targeted at narrower audiences such as role based, industry based or event account (client)-based. It makes sense: most of us recognize that cost-of-sales is lower to retain or grow a client versus finding a new client. All that is required, then, is to allocate more of your marketing dollars in that direction.
Offline to Online. Marketers have been cutting back on physical collateral, direct mail and events for years. Join the majority, and make 2010 the year that you accelerate online spending on channels such as search engine marketing, webinars, newsletters, and virtual events. In a Forrester Research report, “US Interactive Marketing Forecast, 2009 to 2014,” 60% of those surveyed will shift budget away from traditional marketing to interactive marketing in 2010. Interactive marketing will represent 21% ($55B) of all marketing spend in 2014. Read more…
Although be careful not to abandon offline marketing altogether. I read this week that direct mail usage in the US was down 27% in 2009, but that small and medium-size businesses ($250M-750M) have expressed to their partners that they are inundated with too much email and that they would actually prefer a return to more direct mail. So the message: pick your spots.
Outsource Marketing. We typically think of outsourcing IT or BPO work. But why not marketing? I bet you’d be surprised that companies are not just saving money by outsourcing non-core marketing activities, but also getting the same quality and productivity. That has been my experience: my entire MindTree marketing team sits in India and it works great. And my offshore team is responsible for the tactical and the strategic.
What are you doing when asked to trim marketing spend? I would love to hear from you.
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Vijay. M says:
Hi Joe,
Working on a tight budget is always a challenge and it should be tackled effectively. So carrying out the right tasks to gain the maximum benefits is a crucial factor during these times.
Marketing activities have to be selected effectively and each activity should be carried out efficiently, which is easier said that done. Following a set of best practices in marketing can lead to optimized cost management.
Regards, Vijay
S.R.Dinesh says:
Hi Joe,
Cost savings might not be the benefit that always one gets from outsourcing marketing activities but it would be to get experts in a specific field. But you are right about outsourcing non-core marketing activities.
Marketers core job is to understand markets, drive appropriate solutions for the segments and leave the rest to the marketing services companies. But it is easier said than done as organizations at different phases of marketing adoption will have its own marketing readiness. My experience is that if one forces strategic marketing intent on the organization when the marketing function is new and requires tactical marketing, it might backfire.
All marketers should attempt at drawing up a marketing readiness index (MRI) for their organization based on certain factors to assess what marketing support does an organization require.
Having said that it should always be the endeavor of the marketing team to move the organizations mindset towards strategic marketing and that’s my focus in my company.
Joseph King says:
Vijay:
I agee…nobody said it would be easier. But you are right, it puts the emphasis on doing the right things to maximize your ROI.
Joe