I recently read a post on LinkedIn that said, ‘During times of uncertainty, switching off all marketing, is like switching off all the lights to save money’. As I type that, I can literally hear my mum shouting at me and my siblings when we were kids about the house being like ‘bloody Blackpool illuminations’ – a memory that will come screaming back to anyone with northern parents.
But the point is, it isn’t as black and white as off or on. It’s about having the right marketing (or lights) turned on at the right time. Don’t get me wrong – when times are tough or the future is unknown, all businesses, like all individuals, will look at their outgoings vs income and make decisions about what spend is essential and where savings can be made. The problem is – businesses often see ‘marketing’ as a luxury, a nice to have. To many businesses, marketing is just one line on a P&L, when the reality is marketing is made up of so many different channels – all with their own costs, all with their own ROI, all with their own purpose. To just turn all marketing off means your business pretty much goes dark – the shop window disappears, and you aren’t front of mind with your customers anymore.
At co&co we have worked with a number of our clients recently to determine what is (for want of a better phrase and to stay with my earlier analogy) ‘lights on activity’, and what can be dialled down for the time being. In every single instance our clients have saved money, tightened their belts – and ultimately made the spend more efficient. We tell our clients all the time – marketing is not some dark art, it’s a series of leavers, buttons and pullies – good marketing is knowing which button to push and which leaver to pull in-line with marketing conditions.
I feel like my mum is getting a lot of attention in this article – but to use another one of her favourite phases (and frankly a top 10 phrase of any mum on the planet) ‘If they jumped off a bridge would you do the same thing?’. Course not. Just because you see other people or other businesses doing something, doesn’t mean you should do it too. In tough times you have to have some bottle. Have an investors mentality – when things are certain, change nothing and enjoy it, when times are uncertain, invest – rightly or wrongly, that is where the biggest gains are made.
Plus, when your competitors turn off their marketing, they think they are just saving money, but what they are actually doing is giving up valuable market share – market share that if you keep your marketing running, you can take from them.
Sounds obvious, but marketing is not the only cost to a business – sure it’s a significant cost, maybe even the biggest in most cases – but it’s not the whole budget. Everything a business does in order to grow – starts with marketing. New sale on the board? That new customer had to have seen you somewhere – marketing. New recruits joining the business? How do you think they form an opinion about your brand? – Marketing. Going through a new wave of investment and need to impress the banks? Who is it that creates all your shiny assets as the backdrop to your narrative? – Marketing. You get my point.
So, when times are tight – where else can savings be made? One of the other biggest line items on a business’s P&L is operational costs. Software, subscriptions, licence fees etc. Unlike marketing costs which are probably one of the most monitored and tracked costs in a business, operational costs are usually the ones that get forgotten about. They are the costs that are set up by DD every month and just leave the company accounts with anyone giving much notice. Most clients we work with to become more efficient with their spend have no idea what at least a handful of their operational costs even are. So, if you are looking to save money – do a bit of housework first.
One thing to remember when you are going through tough times as a business – is that your customers probably are too. Take the current global pandemic as an example – when we went into full lockdown, businesses had to close, people had to work from home, day to day life changed literally overnight. There was no steady decline into it, it just happened.
Businesses had to be quick to react, not only to market conditions, but also to the everyday operational running of their businesses. For those that relied on face to face contact with their customers (like banks) they not only had to work out how to service those customers who would normally come into branch, but they had a job to do in reassuring their customers that everything would be ok.
Those businesses that put customer service at the forefront of their covid contingency plans were, on the face of it, just altering their day to day operations to keep going – to stay afloat. But actually, underneath it all, something much more powerful was happening – they were building better, stronger, longer term relationships with their customers. Which brings me on to reason 4…
If you work in sales, or are still living in the 1980s, then make sure you are sat down for this next bit – not all marketing is for the purpose of selling. (Say it to yourself a few times if you need to get more comfortable with this fact – and it is a fact.)
When businesses think about cutting costs – the thought process usually goes a bit like this….
Man 1 with a spreadsheet: ‘We aren’t doing as many sales as we were’
Man 2 with a spreadsheet: ‘We need to make some savings’
Man 1 again: ‘Grab that P&L we did ages ago’
Man 2: ‘Ooo look at all that money we have budgeted for marketing’
Man 1… again: ‘Yea – we aren’t doing enough sales, so there’s no point in marketing’
Man 2: ‘Cut all the marketing spend’
(1 week later…)
Man 1 with a new spreadsheet: ‘Sales haven’t picked up have they’
Man 2: ‘No - in fact, our website traffic, inbound enquiries, social media interaction, online engagement and rich content downloads have also died off’
Both men: ‘Why has that happened?’
To reiterate my earlier point – marketing is about knowing which leavers to pull and buttons to press – and more importantly, when to do it. When sales are down, it does make logical sense to pull back (not cut) the acquisition elements of your marketing. If people are literally not in market for what you sell – then you can make savings here. However – remember the earlier point? About when times are tough for you, your customer is probably feeling the pinch too? Well, when times are tough for consumers, they arguable become more brand loyal than ever – they don’t have the pennies to be taking punts, so they find a brand they like, a brand they trust, and a brand that appreciates them – and that is where they ultimately end up spending their money when the time is right.
When the ‘sales’ dry up – focus on building brand loyalty, relationships, brand equity. Rich content, personalised communications that keep you front of mind. All of that work will pay (literal) dividends in the long run.
Without sounding like some new age hippy, one of the best sayings in the world is, ‘This too shall pass’.
Hard times do not last forever – and when the mist and fog of those hard times passes, you want to be in the best shape possible to move forward into better times.
So, while you might not have been spending your marketing budget on hard core lead gen to drive sales, the money you have invested into building better relationships with your customers will start paying off when they too have money to spend again.