At times of crisis, what gets cut first? Travel, entertainment, contracts for seemingly nice-to-haves like executive coaching and people development. Freelancers and easily terminated contracts.
And marketing.
Marketing budgets get slashed pretty quickly when money is tight. I know, I have done it myself, without a qualm. Lay off the agency, stop media spend, promise to do more in-house with the resources still left.
But that short-term approach of cutting marketing across the board often turns out to be exactly that – short-term and very dangerous to the long-term health of a company that by definition is in the midst of a crisis.
Smart entrepreneurs
I was chatting to my top-line marketing strategist friend Tony Frawley from Limerick recently who reminded me: “You know, smart entrepreneurs do understand that marketing is actually an investment, not a cost. They realise how important it is in these days.”
The thing with marketing is that company bosses often don’t really understand and see the value of it. It’s a budget line item and marketing execs are well-used to the annual trade-off on whether they will get a bit more or a bit less of their budget to play with.
The real debate
The real debate should be not about marketing being a cost, but an investment. What is the return on investment for every euro or pound spent on marketing?
Does it bring in new clients, turn prospects into buyers, launch successful new products, open up new markets. Is there a 5:1 or, better still, 10:1 return on the investment of marketing.
That is the challenge for entrepreneurs and the thought process behind whether to slash the funds or double-down on investing in communicating with current customers and telling your business story to new ones.
Get rid of marketing budgets by all means. But make the proper investigation into whether investing in marketing will contribute to the business surviving the Covid-19 crisis and going on to grow in the future.
Cash is a precious resource
And then decide where to spend the precious resource of cash. Measure the results. Hold marketing folks accountable and ensure the marketing and sales teams are joined at the hip, blood brothers or sisters.
Many small and medium enterprises are in a precarious position right now. But there is great opportunity for so many who can invest in a thoughtful and strategic way to build for the future.
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