Times are tough right now. Businesses are bracing for a further economic downturn, with the Bank of England warning that our economy will continue to shrink through to the end of 2023.
Across the UK, businesses are implementing budget cuts, workforce downsizing and other cost cutting measures in an attempt to stay afloat.
Marketing takes a hit
When it comes to budget cuts, marketing is often one of the first departments to take a hit.
That’s bad news on every level. And it’s also very shortsighted. In reality, businesses that continue to invest in marketing through economic uncertainty will not only ensure their survival, but will also grow faster after the recession compared with businesses that cut their budgets.
Businesses that continue to invest in marketing through economic uncertainty will not only ensure their survival, but will also grow faster after the recession compared with businesses that cut their budgets.
That’s according to research by ex-Harvard Business School leader Nitin Nohria (more on that coming up).
The business case for marketing investment
If your marketing team is facing budget cuts this year or next year, here are some facts and figures you may find useful in arguing the business case for maintaining an investment in marketing.
[No time to read the blog post? Get a handy infographic summary of everything you need to know.]
Business objectives must still be met
Despite the dire outlook, businesses have to find leads and sales in order to stay afloat.
In fact, 84% of marketers surveyed by Mediahawk recently said their primary goal going forward is revenue growth.
What’s more, 86% said they’re focusing their efforts on driving traffic to their websites. Clearly, neither of these objectives can be met without a continued investment in marketing.
CMOs recognise the need for growth
Luckily, the vast majority of marketing leaders know that continuing to invest in promoting their businesses will bring long-term growth.
A recent Gartner survey found that 70% of CMOs are planning to increase their budgets, ensuring their marketing teams are able to continue attracting vital leads and sales during the difficult times.
This is good news. But marketers must now work extra hard to prove the value of their effort and ensure their bosses can see results – or risk that budget being pulled.
Digital marketing continues to deliver
Throughout the Covid-19 pandemic, we saw a massive ramping up of digital marketing efforts in almost every sector.
Now, with both B2C and B2B audiences continuing to spend more and more time online, businesses have to get serious about investing in digital marketing activities – especially during a period of recession where every lead and sale counts.
According to a survey by Clevertouch, 77% of marketers want to allocate more budget to digital marketing over the next 18 months – demonstrating just how big a part it now plays.
Most businesses aren’t planning to cut marketing
Here’s another piece of good news: more than two-thirds of businesses will be significantly increasing their marketing spend this year – for some, by as much as 15%.
The businesses that do this will put themselves at a distinct advantage, bringing long-term growth while their competitors stagnate.
In fact, research by ex-Harvard Business School leader Nitin Nohria has shown that 9% of companies emerge from a recession in better shape by investing additional marketing spend in strategies proven to increase growth.
Customer retention is a cost-effective growth strategy
We all know that it costs less to retain customers than to attract new ones. And during a recession, this can be a very cost-effective strategy to grow your business.
So much so that 69% of marketers are planning to allocate more budget to customer retention efforts – such as by up-selling and cross-selling products and services to existing customers.
Martech tools can be your secret weapon
Many businesses who plan to cut their marketing budgets will switch off or cease to use their martech tools in a bid to cut costs.
In fact, 44% of marketers have said their martech platforms were largely unused during the Covid-19 pandemic. This puts businesses who have continued to make the most of their martech tools on the front foot. They will now be several steps ahead, gaining insights and strategic understanding to which the competition is no longer privy.
Businesses who have continued to make the most of their martech tools are now several steps ahead, gaining insights and strategic understanding to which the competition is no longer privy.
Life isn’t easy right now. And marketers are under more pressure than ever to deliver results. So if you’re facing budget cuts or calls to ‘do more with less’, use these data points to help build your business case for continued investment in marketing.
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