The false economies of cutting your marketing spend

HomeBlogThe false economies of cutting your marketing spend

“Half of my marketing budget is wasted…” The most common misrepresentation of John Wanamaker’s famous quote. I can definitely say that I’ve politely smiled at that one too many times! It’s true that blog reads, press quotes, email opens, social media followers, website visitors or event attendees don’t necessarily make a measurable difference to the bottom line in that month, quarter or even business year. This is especially true in a business with a long sales cycle. So, you might want to look at cutting your marketing spend?
These times are unprecedented and as we face the largest economic downturn in our lifetimes, it’s fair to say – tough right now. Businesses everywhere are scrutinising costs, looking to drive efficiencies and probably reduce spend. One of the first ports of call when it comes to cutting costs is the marketing budget – this happens in every business, of all sizes, across all industries. This makes sound financial sense – right? No. No. No. Sorry, did I hesitate?
If you stop promoting your business to new customers, cut the engagement with warm leads or shut down conversations with existing customers to save budget now –  you’re robbing Peter to pay Paul. Sales & marketing go hand in hand. Together – the driving force behind bringing valuable new business through the door. So, if you significantly cut, or stop your marketing activity what’s the risk? Here’s a few…
Your reputation and credibility – whether it’s really useful content that stops, your website becomes stagnant or just that your last testimonial is 12 months old – you’re not just missing an opportunity to engage with new customers, you’re likely to be creating doubts in the minds of those that know you. How strong is the business? If I sign this contract will they be there in 6 months to make sure it’s delivered?
Sales – it’s obvious, but if you’re not engaging with both potential and existing customers your sales numbers will go down. They need regularly reminding about what you can do, the benefits they’ll receive from having your product or service and why you’re the best choice – because it’s unlikely that you’re the only thing they think about in their busy lives. In the 70’s it was estimated that the average person saw around 1000 advertising messages per day. Fast forward to the 2020’s and that figure is estimated to be around 8000 messages per day. Repetition and consistency are key to being both recognised and remembered.
Your relationships and loyalty – who else benefits from your marketing spend? It could be agencies, publications, service providers, industry bodies – whatever the supply chain, cutting your marketing spend will have a knock on effect. You probably won’t get that call to see if you want to speak at an event, or asked for 500 words to fill an empty page. These are quid pro quo relationships based on a set of commercials.
Your share of voice and share of market – whilst you look at cutting budgets your competitors will be upping theirs and getting ready to eat your lunch. If you’re not maintaining your market presence someone else will snap it up. Share of voice is intrinsically linked to share of market, so you’ll be handing potential customers over to your biggest competitor.
The top of the sales funnel – imagine your buying cycle as a sink without a plug. When you stop marketing you’re turning off the tap. The sink won’t empty straight away, but over time you’ll see a downturn in the number of new customers. Let’s say you have a standard business model and 20% of your revenue comes from new customers – with the tap turned off where will you get that 20% from? Stopping marketing won’t just impact your growth plans, it will also hit the status quo.
Ultimately you have to weigh up the short term gain, for long term pain. That doesn’t mean you can’t trim the fat, but if you’re not facing insolvency start by looking to drive efficiencies, optimising content and channels and understanding your most effective communications mix. This will ensure you don’t fall too far into the shadows of your competitors.
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