Marketers, it's time to face 2023 head-on.
It can be tricky (to say the least!) to create a marketing budget with so much uncertainty swirling around the economic forcast of the upcoming year.
When it comes to marketing budgeting and planning, you may be feeling some extra pressure this year. Balancing both your short-term and long-term marketing and growth goals amid a lack of certainty about the state of the economy is tricky, and often the first response is to start slashing budgets.
But as an agency with 20+ years under our belt, we’ve seen our clients through everything from recessions to a global pandemic, and we believe that with the right tools, support, and flexibility, you can maintain a healthy budget and set your organization up for growth this year.
Based on our experience, we’ve identified 6 ways you can optimize your marketing budget to succeed, even during an economic downturn.
1. Resist the temptation to make huge cuts to your marketing budget with a recession looming.
It can be tempting to assume the best course of action is to slash budgets across the board — especially the marketing budget. For savvy marketers, however, the fact that your competitors may be cutting their marketing budgets presents a significant opportunity.
During the 2008-2010 recession, the Harvard Business Review noted:
“Although it’s wise to contain costs, failing to support brands or examine core customers’ changing needs can jeopardize performance over the long term. Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.”
According to the 2022 Gartner CMO Survey, marketing budgets climbed from 6.4% of company revenue in 2021 to 9.5% in 2022, but still lag behind pre-pandemic spending.
If you continue to strategically spend while your competitors cut back, you’ll easily outspend – and outperform – them when it comes to lead generation and sales. The key lies in budget optimization.
2. Alignment with your sales team is crucial.
Far too many companies have a tendency to work in silos. This lack of communication can severely impact the work that the marketing team can do, to the detriment of the company’s bottom line.
If the marketing team doesn’t fully understand the sales team’s objectives for the year, how can they adequately plan and fund the activities required to help them achieve these goals? If you want to make every dollar count, especially when it comes to optimizing your budget for an anticipated recession, it’s imperative that you create alignment between sales and marketing.
Here are some tactics you can use to align your teams:
Review and update your customer journey and buyer personas together
Block off time with both teams to share, discuss, and create unified goals for 2023
Establish a routine for checking in with each other on a regular basis, as well as extended time for reviewing goals and objectives quarterly
Collaborate on content creation
3. Calculate all the costs.
Staffing likely takes up a significant portion of your budget. As you review the marketing plan you put together with your sales team, how much will be done in-house? Do you need extra help from an agency partner? There is an opportunity cost that should be addressed, when it comes to performing the work in-house versus hiring an agency.
How much do professional digital marketing services cost? There are several factors to consider, so we always recommend reaching out to a trusted agency (like Speak) for an accurate estimate. Here are some line items that might make sense to outsource:
If you’re on the fence about hiring additional in-house marketing team members, keep in mind that, with an agency partner, you can get a whole team of experts, often for less than the cost of one new employee. Depending on your needs, outsourcing may offer some cost savings that can be channeled elsewhere in your budget.
4. Consider your cornerstones.
Don’t put off making strategic investments that are critical to your long-term success. The foundation of a successful marketing plan – in any economy – hinges on two things: a conversion-focused website and a multi-faceted audience growth plan.
Your website is your most important marketing tool – and the single best point of conversion for your business. So if your website isn’t driving leads, it’s time to make a case for a redesign. As technology advances, so do your customers’ expectations. If your website is more than three years old, it’s time to evaluate this critical investment in your organization’s future.
Now, a website built to convert is useless if you’re not generating traffic. There is no one-size-fits-all solution for audience growth, and there are practically unlimited channels and strategies available to you. Where would your budget have the biggest impact? If you’re considering an agency partner, we’d love to help you gain a fresh perspective on growth strategies for your organization.
As competition increases, you need to have every strategic advantage in place to capture your share (and more!) of the market.
5. Prioritize and optimize your budget.
It can be tempting to experiment with your marketing plan on new ideas and technologies, but if you’re trying to optimize it for maximum results, it’s important to curb that enthusiasm…just a little. We’re all for testing new strategies, but we never want to put all our eggs in a new, unproven basket.
The 70-20-10 rule can help you optimize your budget while also testing new ideas:
70% of your budget is allocated toward strategies you know work well (demonstrated ROI)
20% of your budget is allocated toward new strategies aimed at helping you grow
10% of your budget is allocated toward experimental strategies
Using the 70/20/10 rule keeps the bulk of your budget on marketing channels that consistently drive positive ROI for your business while freeing up some dollars for strategic experimentation that can lead to further growth.
6. Be flexible, monitor, and scale.
The most important thing you can do as a marketer is adapt as the market shifts. The key is prioritizing flexibility in your budget between your short- and long-term goals, so you have the freedom to flex as your business needs evolve.
An agile approach to your strategy (and budget) allows you to shift spend where it makes the most impact on ROI. Make sure you’ve identified the metrics that move the needle and develop a dashboard to keep up with your KPI’s. You should be looking at data weekly, evaluating your performance, and making changes as needed. Optimize (or pause) efforts that aren’t generating an acceptable ROI and scale high-performing marketing channels and activities.
The work you do matters. We’re here to help you do more of it.
The last couple of years have been a wild ride, and it doesn’t appear to be settling down anytime soon. The Speak team is flush with experts in every discipline, and we have strategists on the ready to help you dig in and prepare for an incredible 2023, despite the challenges ahead.