Reading Room
Marketing Through Recession – TO CUT OR NOT TO CUT
Let's set one thing straight right from the start: In a recession, you can't not cut—no matter how many articles claim that marketing budgets shouldn't be slashed. That battle is lost, so let's focus on the war. According to some experts, that means making sure the cuts you make have long-term, strategic thinking behind them. Some of the tips they offer:
Be choosy. You must achieve your company’s reduction targets, but don't cut X% across the board; that just "strengthens weaknesses and weakens strengths,". So pick and choose.
Ditch the money pits. Which client groups and services have the least value (return on the pound)? Stop throwing your marketing budget at them.
Slash the easy stuff (eg, corporate hospitality). And if it’s really tight, it might also make sense to cut long-term initiatives like branding, and keep those that bring short-term returns. But if your survival is a certainty, consider the net present value (NPV) of the anticipated return for each area of investment—and keep investing in those with the best returns.
The Po!nt: Cut—with care. Cutting strategically will help ensure that your business will emerge from the recession poised to thrive.
And what NOT to CUT….
Client retention. Now is the time to invest more in retaining your most valuable clients, because the alternative—client acquisition—is far more expensive.
Client research. The economy is affecting your clients, too. If you don't know how their wants and needs are evolving, you need to spend a little on research to find out—before you end up backing, or cutting back, the wrong initiatives.
Updating technology. Are your competitors' business models built on newer technology platforms? If so, you may need to spend to gain the manoeuvrability you need to compete.
Messaging. Does your company's messaging still resonate? If not, spend to boost its relevance. Shifting to new media may lower costs, but your message still has to be on target and in tune with the times, or you won't improve engagement.
The Po!nt: Pay it forward. A little forethought in these areas may help you break the downward cycle of budget cuts by actually demonstrating the value of having your finger on the pulse of the customer, the market, and the business overall.
For further information, please contact us on 0121 355 4774 or email
info@je-consulting.co.uk or send us an enquiry.
As no two practices are ever
the same, our services are tailored
to meet
your specific needs.
Related Links
