Setting Priorities When Your Marketing Budget is Slashed
As businesses navigate their way through an unpredictable crisis, boardrooms across the world are echoing with a common refrain: "Do more with less." This often translates to "we have to cut back, and marketing will need to find some efficiencies."
This is a common problem. Reducing your marketing budget may seem like an appropriate place to start cutting costs. Your marketing team’s energy is often invested in learning, trying and repeating. Those processes can have a holistic effect on sales and conversion rates, but by investing in marketing efforts that directly impact your sales funnel, your marketing team can increase ROI and drive measurable business performance.
You’ll also establish a stronger foundation for future budget allocations. When marketing ROI is achieved through new processes, insights, and metrics, it’s easier to make the case for marketing investments up the chain.
Optimizing marketing efforts to feed your sales funnel does require an investment -- and of course, that’s a challenge when your coffers are nearly empty. Let’s be honest: As marketers, we rarely have the discipline to keep the Vegas jar filled for the day when the tech stack needs an upgrade. But I’ve observed some consistent approaches that have helped marketing teams of all shapes and sizes make it happen.
Step 1: Prune the Hedges
This might sound completely obvious. Naturally, we’re going to eliminate nonessential costs in order to meet budget. However, I’ve seen many marketers struggle to see the forest for the trees at this stage. Prioritizing what to prune versus what stays versus what to upgrade is not an easy process.
For example, a common “fix” is to cut staff. By eliminating one FTE, a marketing team can plan to outsource or automate some functions at a lower cost. Simple. Unfortunately, that’s often a permanent step backward for the team, keeping the cycle of inefficiency rolling and ROI dropping.
Another approach to pruning would put attention on channel engagement and conversion performance. Marketers frequently lean toward optimism in their channel strategy, believing that the next campaign will hopefully hit. In reality, if they could view the data as the ‘house’ does, they’d gain instant clarity.
So, here are some general rules about channel investments and prioritization. Note: These change dramatically based on personas, buyer journeys, industries, and other factors.
- Social is excellent for top-of-funnel users, and it works best with a paid strategy. The results are not typically immediate, in particular with B2B. Thinning down investments in tactical social channels -- or potentially all social channels -- may make the most sense with budget challenges.
- Check your tech stack for unnecessary licenses, duplicative tech, or recent releases that can replace current systems for less. These costs can save you in the long run.
- Train staff in services that vendors or outsourced resources are likely providing. Try to use vendors for more strategic help for a highly-valued, fresh outsider viewpoint. Agencies will often try to pitch more production work as it uses more junior staff, thus giving them more room for margin. Take control of that cycle and thus your budget. Use your team for execution and liaising with the core business.
- Drop investments on all paid ad spend. Even the high performers. Take those dollars and invest in insights. It’s counter-intuitive, but I’ll explain later.
Step 2: Automate
Marketing automation is a term that gets thrown around to cover a lot of concepts. For anyone running MailChimp and Excel, automation is viewed as an aspirational AI wonderland of hands-free, mind-free marketing. In reality, marketing automation just means we use technology in addition to processes to make marketing teams and salespeople more effective and efficient.
To most people, marketing automation translates to email marketing and automated email delivery. These actions could be automatically triggered based on events such as form submission or as periodic email deliveries over the course of weeks. The reality is that true marketing automation goes way beyond simply sending more emails.
Marketing automation is used in many ways, and it can be harnessed both for the power of good and evil. Here are a few examples of areas to automate:
- Retargeting: With automation platforms, you can turn website behaviors into triggers that deliver timely and relevant emails to prospects. For example, when an existing lead comes back to a pricing page, you can automatically send an email from the assigned sales rep. As they view case studies on the website, you could trigger an email that drives them to a more detailed version to download.
- Abandoned Carts: Many of us experience this application in the form of ads, but it can also be a huge component of automating email marketing. With email automation, you can deliver a reminder email or even a discount code to help drive conversions -- at a much lower cost than buying ads.
- Personalized experiences: with marketing automation platforms connected to CRM data, personalized recommendations can go beyond adding someone's first name. Now the copy of the email can deliver a more nuanced response based on the recipient's job title or role, or it can deliver more industry relevant content and terminology.
80% of new leads will never become a sale. However, that rate improves as leads continue to engage with your brand. It's important to keep contacts interacting with some element of your organization as they wait for the right time to convert -- whether it's content, products, or even just POVs on related events.
Typically, you’d manage lead-nurturing with a CRM platform. In your CRM platform, you can automate actions based on the behavior of your leads, such as triggering emails, ads, and even direct mail. Depending on the CRM platform you use (suggestions below), you create if/then workflows in which an email is sent to a contact in your database if certain criteria are met. Those triggers can include:
- Persona data: Who they are. What they most likely are buying, wanting, needing, or evaluating. How they buy. Why they buy. What influences them. What deters them.
- Location data: Where they are (zip code, IP address, email domain). Localization offers great opportunities for personalization.
- Change data: A recent change of employer, triggered by an email address change or a LinkedIn profile change.
- Recent history: Which pages and downloads did they show interest in last time? What site did they come from?
- Trend shifts/thought leadership: Recent industry news that might affect your target
- Events: Which events are they registered for or likely to attend? Will you attend? Will neither of you attend, but the event in question is considered thought-provoking?
Which CRM platform should you use? We often recommend Hubspot for mid- to large-market organizations. It's easy to use, and it can be scaled up to accommodate growth over time. A few other platforms fall in this early stage range, including Zoho and Monday.com.
Bigger, more complex platforms such as Marketo are typically for larger enterprise organizations looking to automate multiple workstreams across a variety of divisions and departments. Other systems that would fall in the enterprise category include Salesforce/Pardot, SAP, Oracle, and Infusionsoft.
Automated nurturing should lead to increased conversions, which is a key driver of ROI. Conversions can be automated simply by proxy. But by improving the tracking and attribution related to conversions, you can also improve targeting, performance, and ultimately budget ROI.
One good exercise here is to make sure you know exactly what a conversion means for your business. The definition changes from business to business, industry to industry, and team to team. Here’s how a conversion can be defined differently across sectors:
- eCommerce: Create an account, add to cart, and process credit card transaction.
- Products: Trial downloads and demo requests.
- Services: Inquiries, contact, and handraisers.
- Suppliers: Demos and inquiries.
- Tech: Articles, events, and releases.
Step 3. Go Digital
Your definition of digital is no doubt different than mine, your CEO’s, or your neighbor’s. You need to leverage digital technologies and techniques that are tried and true to help you decrease marketing time and maximize your investment. Some of this is covered in the marketing automation section above, but much of this is really about discipline and approach -- and less about the actual technology.
Here are a few examples:
- Pilot. Prove. Scale: This general concept comes from the world of application development. It can be hard for marketing professionals to think this way; they’re more attuned to going big, getting creative, and hoping for the best. By snapping into a smaller, more nimble, and iterative approach to testing, releasing, learning, and adapting campaigns, content and messaging can do wonders for your soul and your bottom line.
- Smaller Audiences: Many marketers come from advertising circles. They come from the school of thought that bigger exposure leads to bigger engagement leads to bigger sales and revenue. But with digital thinking, that’s inverted. We get hyper-focused, right down to the individual. We crave data that helps us establish intimate relationships, not broad ones. We slice and dice audience metrics until we’re creating campaigns that may reach only a handful at a time -- but will radically raise nurture, engagement, and conversion levels.
- Get the Tech Stack in Order: We’ve covered automation, but there are other fundamental parts of a marketing team's tech stack that will set the stage for optimization and scale. Do you have a CRM (Customer Relationship Management) platform? Is it collecting the right data, and are you using it correctly at key stages of your user-buyer flow? Is Google Analytics in place, and are you able to gather data you need? Can you attribute leads and conversions across different channels in the user journey? Is something like HotJar in place to help understand why users may be leaving your website? Getting the most out of your marketing efforts requires using the right technology at several stages of your workflow.
Step 4. Don’t Prioritize Conversions
We’ve already talked a little bit about conversions and how they are defined differently. But in the purest sense of the word, a conversion would mean a user clicks on something to ask you to sell them something. Even with that as a definition, that shouldn’t be your focus. That’s sales.
The C-suite may cut your spending, and they may even ask you to prioritize conversions, sales, or revenue. This is a natural knee-jerk reaction, as it seems to help immediately offset the painful projections and reports they just witnessed. But in reality, it just exacerbates the problem.
Marketing exists to help develop a sales funnel -- a cycle of engagement in which users, buyers, and consumers can be engaged at any moment along the way, then nurtured until converted. Maybe it’ll happen tomorrow. Maybe next year. Maybe never. But marketing must create this cycle and communicate value through insights, data, and many of the techniques touched on above.
As nurturing increases, engagement and conversions will naturally follow. But if you focus next quarter on filling the pipeline with conversions, you’ll break the cycle and lose your momentum.
Step 5: Use Insights to Prove ROI
In the end, the only way to prove and communicate value is through data and insights. We keep hitting on it, but it merits one step all to itself.
You need to be able to monitor, track, and attribute engagement with your brand or product. At a moment’s notice, you also must be able to show evidence of marketing’s impact on measurable variables such as awareness, sentiment, engagement, conversions, and satisfaction.
Once you’re able to clearly report value, you can now become more data-driven in your decisions. Content, campaigns, and audiences can be selected based on what the data tells you. Automation can be implemented at optimal phases of the cycle based on data-driven insights. The C-suite now learns to ask ‘what does the data say’ instead of ‘here’s what Bloomberg said we should focus on next quarter.’
With some discipline, some courage, and a little perspective, you may even see the silver lining in the budget cut. It's at these times where we dig deep and find a new course to chart. A good time to reinvent. Clean house. Become a well-oiled machine. Embrace the challenge.
Onward and upward.