In an attempt to perform some much-needed damage control, ‘cost-cutting’ has become a far too familiar and over-used phrase in business discussions and plans. But is it really the panacea to businesses’ troubles as it’s perceived to be?
With talks of an economic recession plaguing every news outlet, the business slowdown seems almost inevitable.
Global growth is projected to slow from an estimated 6.1% to 3.6% in 2022 and 2023, according to the IMF. Pair that with supply chain disruptions and skyrocketing inflation, and cutbacks appear like the only viable way to withstand the next few years as a business.
Marketing overcame these same struggles in 2020 with creativity and resilience. Budgets seem to have recovered slightly from historic lows, but uncertainty still remains.
Now marketers are expected to continue making the most of new 2022 budgets, balance investment costs, and come up with smart initiatives to prove the value of investing in marketing.
Cutting marketing spending is usually counterproductive. There, we said it.
Why is the marketing budget usually the first to be put under the recession guillotine? Doesn’t it make sense to invest more in your marketing in order to attract more customers?
Well, many businesses cut marketing costs because they view marketing to be secondary to what they normally offer. Businesses often take marketers for granted when everything is booming and seen as an unnecessary expense when business is stagnant.
Today, despite already being stretched thin in resources and manpower, marketing teams are still being thrown into the spotlight, expected to do more with less, with Forbes reporting that an average of 9.2% of marketing jobs have been lost in the pandemic.
At the same time, marketing teams are being asked to increase the volume of digital output and content, despite an overall decrease in marketing spending. Most CMOs reported that they are increasing their digital marketing spending by only 9.57%.
Pulses will be racing in marketing teams as they will need to obtain even stronger ROI to demonstrate that they still deserve investment, despite being expected to do more with less.
The impacts of the cost-of-living crisis can prompt enterprises to shift focus from growth and innovation towards cost optimization, more cost pressure and margin erosion, and ultimately reorganization pressures in an attempt to ride out the storm.
Studies, however, have shown that businesses who market themselves during rough patches are the ones most likely to survive, according to Forbes, as reducing marketing spending severely drags down marketing performance.
Take, for instance, that for a large number of marketers, it’s the lack of budget that is holding them back from fully leveraging marketing operations. When cutting back means scaling down activities to a point where they no longer drive your results, you’ll question if cutting corners is worth it.
If you want your team to become a lean, mean marketing machine, you need to weigh the costs of skills, processes, and technology in the context of their returns.
Cutting costs without risking marketing performance can feel like an impossible balancing act. But, with effective prioritization, a thorough plan, and the right tools, spending less can turn out to be the catalyst for achieving better results.
Here’s how to make the most out of your budget and refocus your spending by making smarter decisions.
As mentioned earlier, businesses that market themselves well during rough patches are more likely to survive. Why? Because above all else, there’s less competition.
Effective marketing is difficult to get right; the biggest determinant of effective marketing, however, is your audience. When CMOs focus too much on short-term metrics, like sales revenue, instead of longer-term efforts like brand building, others can jump in and make a name of themselves, pulling your customers away.
One way to ensure your focus is on your audience is to ensure you’re properly targeting your buyer persona at the right time. Businesses should always be led by demand and focus on showing consumers what they actually want to see.
Your language should tailor to your customer’s needs. That way, the company demonstrates how much they value each of its customers by tailoring each piece of content toward its customers’ unique challenges.
Brand awareness is critical for fostering trust, long-term loyalty, and brand equity. When marketers cut back on spending, the brand can lose their ‘share of mind’ with customers. This impacts their current – and possibly future – sales.
Furthermore, an increase in ‘share of voice’ typically leads to an increase in market share. Recent research by the Journal of Marketing found that satisfied customers are more responsive to brand marketing and sales efforts. As well as being more open to future company offers.
Using modular content helps to facilitate a continuous conversation through content engagement with your audience. Enabling teams to work with individual blocks of content and content sets to mix context-specific experiences.
It’s also an efficient way to generate content, which can be built for individual use cases, audiences, and channels. With the increasing demand for marketing to prove ROI while producing personalized content, under time constraints. Time is money.
To execute a thorough plan, you need the right capabilities and team. However, 58% of CMOs have reported they lack the in-house capabilities to deliver their strategy. Yet spending on in-house labor is static.
Outsourcing your marketing strategy can be a great way to put your marketing campaigns on autopilot.
But when money is tight, you might want to consider reviewing the external relationships that are not delivering strong ROI. Or those that perform activities that might be cheaper to do in-house. Paying a design or marketing agency thousands for what boils to ‘copy, paste, repeat’ is not desirable or optimal. That process cost will not help you see the value.
It is easy to say that reducing outsourcing cuts costs. But what are the costs of training in-house colleagues or acquiring the necessary software to continue writing and publishing content independently?
Start with the initiatives you derive the clearest results from and take stock of the skills, time, and budget that go into them. Flexible approaches allow you to expand a team of highly specialized marketers that give you options and agility. Further cutting costs and turnaround times.
This can also be done by democratizing your content creation with a centralized platform that is already equipped with a series of on-brand templates to expedite the creation of core content.
Enable anyone in the business to quickly create materials that are dynamic, on-message, and compliant. Now, pressure on marketing can lessen and those frustrating bottlenecks dissipate, delivering significant savings.
Businesses can influence customer purchasing decisions with logic and financial incentives. They are looking for products that will improve their ROI, efficiency, and expertise.
To do this, data is key. Knowing how your content and marketing efforts are performing is key to ensuring efficient spending. Print can no longer fulfill these marketing analytics needs.
The best statistic you can report with a printed brochure is how many have been handed out – but when it comes to the increasing demands on marketing to prove ROI – this just isn’t going to cut it.
Digital brochures can report everything from read times to bounce rate. This means that you can change up your brochures depending on what most people read for the longest, and which pieces of content aren’t keeping readers engaged.
Creating digital brochures means that not only can you save money on distribution and shipping, but also that you can keep your design in-house. Online design platforms – like Turtl – make it easy for anyone to pick up design skills and create quality content.
One of our favorite examples of this in practice is the case of Informa Markets – they found a 90% reduction in production time using Turtl. This amounted to savings of 1,540 hours per person, per year, racking up to $138,000+ annual savings! All whilst maintaining their branding quality and consistency.
A few other ways that digital trumps print is that:
It’s all win-win, really. Beautiful and exciting content, moving with the times, at a fraction of the cost.
Most of the factors influencing marketing spending are beyond the marketer’s control. Despite this, marketers can still influence how much business impact their marketing activities can have.
Marketing information systems, analytics engines, and nurturing brand awareness can transform our understanding of the buyer journey. These help us to better target our prospects and campaigns by shifting your message or value proposition to better suit the times.
Only the most short-sighted view spending on marketing as a sunk cost. Usually, professionals turn to cost-cutting to fix misspent budgets. Instead, marketing leaders must build the patience, trust, and confidence that long-term growth and value are on the horizon.
When thinking of the best way to resource your company’s marketing needs, consider what marketing resource is scarcest; Funds, knowledge, or bandwidth?
There isn’t a one-size-fits-all answer. When everyone is too busy cutting marketing spending, it might just be your time to shine. As Mark Twain once said: “Whenever you find yourself on the side of the majority, it is time to pause and reflect”.
A round up of insights, trends, and tips on the world of content marketing