How to Review Your Investments in Marketing: What You Need to Know to Make Smart Decisions During Recession
Crisis periods require efforts to reduce costs and expenses in companies. The most recent global crisis due to the COVID-19 outbreak has been changing the way companies cope with difficult times. Data released by Statista forecasted that COVID-19 would cause the global real GDP growth to decrease by 0.5 % this year compared to 2019, to 2.4% growth.
To keep businesses afloat during this period, managers need to draw up contingency and replanning plans, which, in most cases, includes reviewing investments in marketing. Readjusting and adjusting is the smartest decision, but it also presents a challenge.
Other global crises linked to internal contexts in countries have already shown how the promotion sector suffers consequences. However, it is possible to overcome this.
During this work of cutting costs and reevaluating expenses, Marketing need not be the sector to suffer the most. There are right strategies that make it possible to have little value and still be successful.
Each company needs to assess its situation in the face of crisis scenarios, such as the coronavirus pandemic, to think of smart solutions.
One of the biggest challenges experienced by marketing teams during a crisis, for a long time, was to prove the relevancy of promotion. Usually, it is one of the sectors of companies that suffered the most from underestimated evaluations.
More recently, especially with the popularisation of digital marketing driven by social media, new challenges need to be overcome. Global economic crises have already shown how much this confidence can be questioned; that is, it is still fragile. One example of it was the 2008 Financial Crisis when the consumer confidence and purchase power went downhill. Moments of financial containment demand cost cuts in various sectors of companies and, in the midst of this, marketing is just another victim.
Learn how to understand if budget cutting is the right thing to do and to assist managers in making data-driven decisions with responsibility and planning. This analysis must start from a concrete observation – and not from an underdeveloped idea motivated only by the need to reduce costs.
After all, how strategic is the marketing sector in the company, and what does it bring, or does it fail to deliver, should it lose investments?
Managers need to take a more in-depth look to understand, first, whether these costs of the marketing budget weigh so much and, later, know if a cut would not bring even worse consequences for the company.
An effective way to do this analysis is to ask a few questions about your company’s relationship with these marketing strategies. Thus, it is easier to project what the effects of this cost cut would be and, at the end of the analysis, to understand whether or not it should be done.
Is the ROI Satisfactory?
What is the return on investment that your marketing strategies have shown? This KPI is crucial and helps to understand whether these costs are empty or whether they make a difference in the company’s development and the results it achieves.
If the ROI is high, it is not difficult to understand that the cost cuts will have a direct impact on the results. It is up to managers to know when they can keep budgets intact or decide that it will be necessary to wipe.
Have the Stategies Met Their Objectives?
As much as planning is the lifeblood of successful strategies, it can happen that they do not bring the desired results. In such cases, it is not always a matter of errors or a judgment that it was not the most appropriate choice.
Sometimes, small adjustments make a strategy take off and achieve previously intended goals and objectives.
If the marketing team has already made these adjustments and realized that it did not affect, perhaps this moment of crisis may be the “push” that was missing to end campaigns. In such cases, the cost cut will not have as significant an impact on results.
What Would Be the Impact on the Brand?
More than sales and other conversions that catch the eye more easily, Marketing today is also about relationships. Companies that do not exercise this proximity to their audience may lose space and have a hard time getting engaged.
In this scenario, cost cuts can significantly impair this approach or the maintenance of the relationship built with the public. To reduce the overhead but sill keeps connected with their clients and leads, businesses can push a blogging strategy. For example, a company that offers
Construction Certificates services used the knowledge of its consultants to answer questions from clients. With that, they allocated the resource in the marketing departments and maintained engagement with its target audience.
Also, marketing helps to build the image of brands in their markets, which can be interrupted with budgets limiting the necessary campaigns and actions.
Understand How to Cut Costs From the Right Decisions
Well, if your company needs to cut costs in marketing, this process must be done based on reliable concepts and data-based.
Even during difficulties in times of crisis, whether internal or global, it is possible to continue doing work to strengthen brands and maintain an honest relationship with the public.
Reviewing investments in Marketing may be necessary, but these efforts must be with an analytical vision and from data and metrics.