The other day we saw a social media post where a marketer was suggesting that small business owners cut their marketing budgets during tough times. We wanted to take a moment to share why we believe that this is terrible advice.
*Disclaimer* This article isn’t written just because we are digital marketers. We understand that many small businesses are struggling right now, and we want to help them in any way possible.
Sure, you may think that we would benefit from you keeping your marketing budget because it would mean more work for us. But that’s not true. We want what’s best for you and your business, even if that means less work for us in the short term.
We believe that cutting your marketing budget is a recipe for disaster because:
First, let’s get one thing clear – tough times don’t last forever, but businesses do. So, if you cut your marketing budget, you will be at a disadvantage when the market eventually picks back up.
#1 thing to keep in mind with economic downturns and recession is:- Don’t panic. So many bad marketing budget decisions are made thinking the worse will happen and it never does. pic.twitter.com/0ieDMqMx6m— Stephen Sumner 📈 (@MrStephenSumner) May 5, 2022
Second, guess who won’t be cutting their marketing budgets during a downturn? Your competition. They will be taking advantage of the fact that you’ve pulled back and will be stealing market share from you.
Third, even if you manage to survive without marketing, what kind of business will you have when things pick back up? The companies that weather tough times the best are usually the ones that continue to market and keep their brand top of mind.
So, if you’re thinking about cutting your marketing budget during tough times, we urge you to reconsider. It’s not worth the risk.
Consequences of Cutting/Decreasing Your Marketing Budget
If you cut your marketing budget during tough times, you will be at a disadvantage when the market eventually picks back up. But there are other consequences of cutting your marketing budget as well.
- You’ll lose market share.
- Your brand awareness will suffer.
- You’ll have a more challenging time attracting new customers.
- You’ll miss out on opportunities to connect with your current customers.
- Your business will be less prepared for the future.
All of these consequences can severely impact your business, so it’s essential to think carefully before reducing your marketing budget.
What you Can Do Instead
Rather than cut your marketing budget, we suggest that you look for ways to make your marketing more efficient.
You should use data (and not your gut) to decide where to allocate your resources.
Here are a few ideas:
- Review your target market and make sure you’re targeting the right people.
- Evaluate your current marketing channels and see if there are any that you can cut back on or eliminate.
- Make sure you are measuring your results to see what’s working and what’s not.
- Invest in marketing automation or other tools to help you work more efficiently.
By taking these steps, you can make sure that your marketing budget is being used effectively and that you’re prepared for whatever the future holds.
If you’ll just take our word for it, that’s fine. But if you need more convincing, here are some stats to back up our claims.
Most companies reduce spending in recessions, especially on marketing items that may be easier to cut. Here’s why you shouldn’t cut your marketing budget in a recession https://t.co/LTiPYvnanu pic.twitter.com/JoXgiUeu9k— Factotum (@wearefactotum) August 17, 2020
- According to the Harvard Business Review, “‘companies that have bounced back most strongly from previous recessions usually did not cut their marketing spend, and in many cases actually increased it. But they did change what they were spending their marketing budget on and when to reflect the new context in which they operated.”
- In 1949, 1954, 1958, and 1961, the economy crashed. Buchen Advertising compiled data on advertising expenditure and revenue to investigate ad dollars versus sales trends in these recessions. They discovered that sales and profits plummeted at firms that reduced their ad expenditures.
And these are just two examples. There are plenty more where that came from. So, if you’re thinking about cutting your marketing budget, think again. It’s not worth the risk.