5 Tips to Convince Your Boss Not to Slash Your Marketing Budget
A recession can spell uncertainty for marketing managers, with marketing budgets coming under severe pressure as owners and boards seek to cut costs. Here, we provide five practical tips on how to convince your boss to think again before slashing your marketing budget.
Your Marketing Budget
Your marketing budget will inevitably make its way on to the boardroom agenda when a recession begins to bite.
For all of the recommendations and articles written by marketing experts about the importance of maintaining – if not growing – the department’s budgets during a downturn, the reality is that business owners still often see this as an easy ‘cost’ to cut back on.
And this is at the heart of the matter. If you don’t have clarity over your numbers and how marketing is driving the business forward, then the likelihood of the arguments you make falling onto deaf ears is going to increase.
As marketers, we can all argue the toss about the negative impact of cutting budgets, but purse-string owners still do it – so here’s some practical tips on how to convince your bosses to keep your marketing budget at its pre-recession levels, or even increase it.
Tip #1 – Know Your Big Numbers
The first step is to ensure you have the evidence on which to base your case: break down your marketing efforts, per tactic or channel, and be armed with the sales being delivered as a result of each.
Of course, your activity on one channel can have an impact on another, but this isn’t the time to be making theoretical arguments. If your budget is in danger of being cut, you need solid data to back up your case.
Start with the biggies:
- How many new customers are you attracting each month?
- What’s your average order value?
- What’s your customer lifetime value?
- What’s the breakdown of your marketing budget?
Then break down each tactic/channel against these numbers. An easy place to start is Google Ads and social media advertising, and while areas such as SEO and offline advertising are going to need some estimations, it’s far better to go to the board or an owner with a breakdown rather than a set of more generic numbers.
Tip #2 – Calculate the Impact of Cutting Your Marketing Budget
It’s understandable for owners to look at what they can cut back – but what will be the impact of doing so? Again, having a solid grasp of your numbers will be hugely valuable to your case.
If you’ve got your data by tactic/channel, then it should be relatively simple to forecast what impact a reduction of say 25%, 50% and 75% in spend, will have on revenue.
Owners may be predicting a reduction in revenue during a recession – but if you can clearly show that this is inevitable if marketing budgets are cut, then you are enhancing your case for the exact opposite decision to be made.
If the business is in danger of losing a significant amount of revenue and those numbers are in black and white, you’ve got a much stronger case than just ‘read these blogs which say you shouldn’t cut back in a recession’. And even if the call is made to still cut marketing spend, at least you’ve set expectations.
Tip #3 – Keep an Even Closer Eye on Competitors
What are they doing? Are they showing signs of cutting back? If so, this can add weight to your argument about investing even more.
Simple maths say that if there are 100 customers interested in what you’re selling, and you and your leading competitor are taking an equal share of those customers right now, then you’re both selling to 50.
But if they cut back their advertising spend, who’s going to pick up those customers? Do you want it to be someone else or do you want it to be you?
Calculate what your uplift could be if you pick up another 5% / 10% / 25% of the market, as competitors reduce their spend.
Tip #4 – Offer to Adjust Your Own Spending
You’ll get a better reaction from your bosses if you offer to make certain concessions and don’t simply argue to retain all of your marketing budget. What could be cut back, at least in the short term, what can be paused, what could be replaced with a cheaper option?
Use your forecasts to identify the poorest performing tactic, based on ROI, and offer to pause this activity.
Alternatively, speak to your external agencies and see how they can adjust their relationship with you – they may be willing to offer a payment plan.
Tip #5 – Tap Into Your Network
When times are tough, the importance of having people you trust and can rely on around you is heightened. Generally, people are happy to help.
Your community may be able to help with the practical elements of recommending a cheaper option for a job, but arguably more importantly, they can be there for support.
Ask them how they’re coping with the pressures, be a supportive arm round the shoulder for them, share ideas on how to work with your respective bosses. Nobody can come up with solutions by themselves all of the time, so offer your help and don’t be afraid to ask for some yourself.
Written with Pimento Member, Quickfire Digital.
Quickfire Digital is a multi-award winning e-commerce focussed development agency, specialising in Shopify & D2C. With clients across the UK and internationally, Quickfire Digital is quickly building a reputation as one of the leading digital agencies in East Anglia. Their data and results first approach sets them apart from many competitors and this has seen them grow from strength to strength.
Pimento‘s community of over 2,500 marketing professionals in over 165 agencies and consultancies, covering over 100 different marketing disciplines, offer you the flexibility to answer any marketing challenge you may have.
Through this network of independent marketing professionals, we are able to tailor teams and responses to your specific requirements. We firmly believe that agility can help drive your profitability – especially during recession, when your marketing budget is squeezed.
Get in touch if If you have a brief, however large or small, we would love to see if we can help.
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