What to Do When Your Marketing Budget Is Cut
Three strategies to improve marketing effectiveness in a challenged market.
Three strategies to improve marketing effectiveness in a challenged market.
The seemingly endless stream of bad economic news is making corporate leaders nervous. Worse yet, some companies including many e-tailers have seen their sales growth soften or even go into decline. Usually the first thing corporate management does when sales drop off is to cut expenses. And one of the first areas to cut is the marketing budget. It’s a favorite target because it tends to be sizable, can be throttled back quickly, and can be cut without stifling revenue immediately.
What should you do if your marketing budget is cut? While your management wants you to react immediately, you know that an ill-considered elimination of marketing support can quickly translate into a disastrous drop in sales. Rather than responding hastily and arbitrarily just to show activity, I recommend performing a quick analysis of your situation to get a better understanding of your best business alternatives. This will help you to redirect your marketing budget to maximize results.
Three Steps to Determine Your Current Business Situation
Before making any decisions about how to reallocate your scarce marketing dollars, it’s critical to understand your business performance to-date and marketing’s role in driving those results as well as how your consumers’ mindset has changed recently.
Check what you competitors are up to. During difficult times, it’s particularly important to consider a wide range of substitute products. (For specifics on competitive analysis, go here.
Put these different analyses together to get a more comprehensive picture of where your business is and how it has changed recently. Use these insights to guide your marketing decisions going forward. Remember that it’s important to track these factors on an on-going basis to enable you to continue to meet the dynamic needs of the marketplace.
Three Strategies to Redirect Remaining Marketing Spend
Based on the current state of your business, revise your marketing using the following three strategies:
So don’t panic if your marketing budget is cut. In hard times, it’s even more necessary to use your analytic tools and marketing creativity to get the most bang for your marketing dollar. With good information, you can effectively determine where to reduce your marketing spend to maximize results in terms of profitability.