Marketing budgets boomed in 2023. An impressive 89% of CMOs and chief marketing executives said they planned to increase their marketing budgets this year to remain competitive with other brands. However, this increase isn’t without risk, as 80% of CEOs worry about a looming recession. This could cause them to be more conservative with spending in the coming months and potentially cause budget cuts in 2024.
If you work for a team looking to cut back on marketing spending, do not panic. It is possible to make strategic choices to allocate your funds effectively. Follow these steps to identify waste and maximize your potential ROI, regardless of how much you can spend.
Identify Unused and Costly Subscriptions
The first step when your marketing department faces budget cuts is identifying waste. This will help you reclaim money that you are already losing with little to no ROI. A great place to start is with your software subscriptions. In 2017, before the global pandemic, the average company used 16 applications to run its operations. In 2020, the number of software apps jumped to 80. In 2020, this number reached 130.
Look at your monthly or annual subscriptions and identify apps and tools you pay for but rarely use. Almost every marketing department has a few vanity tools that no longer provide value or apps they have forgotten about. If you have an A/B testing tool but no longer run these tests, you might be able to cancel that subscription.
Depending on how involved you can make this process, now might be a good time to consider replacing or upgrading your software as well. For example, if you pay for five different tools that all do specific tasks, you might benefit from upgrading to a single software provider that offers all of those services at once. Using the A/B testing example again, you might find an email provider that automatically A/B tests subject lines for you, rendering the specific software subscription moot.
Evaluate Your Vendors and Their Contracts
The next step when working with budget cuts is to consider the various agencies and vendors who support your business. In a survey of 500 business leaders by WebFX, 40.8% of brands say they will handle their marketing efforts in-house, while 19.8% say they plan to outsource their efforts to digital marketing agencies.
Managing your marketing efforts in-house might seem like a stable choice, but it has limits. You are relying on your internal team to provide the best possible results and stay on top of industry trends. Meanwhile, external vendors can help you scale your operations for far less than its costs to hire and onboard employees.
If you already work with agencies and other vendors, evaluate your contracts to ensure they work in your best interest. You might be able to find more affordable agencies that provide similar services. Also, just like your software apps, consider whether it is better to work with a single full-service agency that can handle all of your promotional needs or whether you want to hire multiple vendors to address each part of your marketing stack.
Eliminate Waste From Your Paid Marketing Channels
The first two steps in this process focused on secondary expenses related to running your marketing office. In most cases, you can cancel an unnecessary software tool without impacting your day-to-day operations. However, you will eventually need to look at your campaign spending to meet your budget goals.
Ask each department to audit their marketing efforts to look for waste. This might be easier for some channels than others. For example, our team at J&L Marketing frequently audits paid search campaigns to look for wasted funds. This allows our clients to find underperforming keywords that cost too much or are wasting money. You might be surprised by how much money you can reclaim by going through this process.
Ideally, conducting these audits will allow you to maintain or increase your ROI even though you are spending less. This will allow your team to continue to hit your goals even though you have a smaller budget to work with.
Try to Cut Back, Not Cut Out
Eventually, the time will come when you need to make cuts to your marketing efforts. Even the most optimized marketing budget needs to get pulled back sometimes. As you look at the various tactics at your disposal, try to cut back where you can rather than eliminate channels entirely. Here are a few examples:
- Reduce your blog publishing schedule from weekly to alt-weekly.
- Pull back on your social media posts while still remaining active on critical channels.
- Cut back on the number of videos you publish or virtual live events you have each month.
- Pause specific paid search campaigns that aren’t as lucrative.
- Work with your display ad vendor to choose a smaller package.
- Lower your paid social media spend by a small percentage.
There are multiple reasons to cut back instead of cutting out campaigns. First, this is a fair choice for your team. One part of your marketing division won’t be made redundant, while another has its marketing budget completely intact. Next, this is strategic cutting. Your marketing efforts support one another as a whole ecosystem. If you remove a key part of that ecosystem, other promotional aspects might flounder. For example, if you stop posting your blog content on social media, you might miss a critical opportunity to drive traffic to those pages.
Finally, if your marketing budget is eventually restored, you can revamp your efforts to where they currently are and won’t have to restart campaigns that had been paused for several months or even years.
Reuse and Recycle Content
If you are worried about the amount of content that you need to cut to stay within your budget, brainstorm ways to reuse existing material and recycle your content in ways that can help you save money. Here are a few ways to take existing content and extend its lifespan:
- Update old blog posts with new information: Make sure keywords are optimized and the content reflects current SEO best practices.
- Take long-form videos and break them into short-form clips: This allows you to share YouTube content on social sites like Instagram and Facebook.
- Clip infographics into a mini graph: Pull detailed infographics from past years and share a few key data points that might interest customers.
- Embrace Throwback Thursday: Reshare popular content from a few years back or highlight posts that your audience might have missed.
As you look at your content calendar for the month, see where you can fill in any holes caused by budget cuts with repurposed or refreshed content that you already have. This can potentially help you keep up your posting schedule despite your limited resources.
Reallocate Through Forecasting
While it makes sense to distribute cuts across the board when looking at your marketing channels, you might not want to cut your monthly budgets evenly. It’s easy to say that the marketing budget will have a 10% cut across each month, but that’s not always effective.
Look at sales trends within your car dealership to see how much your business is affected by seasonal spending. If December is a packed month for your business with holiday sales, but January is exceptionally quiet, you might decide to cut the budget more in January to preserve your spending in December.
Check out the sales trends from the past fiscal year, as well as the year before. This can help you identify long-term trends to accurately predict sales. As you draft your forecasts for the coming year and then adjust them with accurate numbers each month, make a note of your budget cuts and how they affected your sales. This will allow you to directly correlate the lower marketing budget with lower revenue as you make your case for more spending in the coming year.
Work With Your Sales Team to Adjust Your Messaging
If your budget is changing significantly, your brand messaging might be as well. For example, gas prices greatly affect the types of cars people buy. When prices are low, consumers are more likely to buy larger trucks. When gas prices increase, buyers opt for more energy-efficient vehicles.
Talk with your sales team to see how you can market your dealership in a manner that drives sales. You have fewer resources now, so you want to maximize your conversions. This could mean switching your messaging to support specific makes or models while also promoting your service department more. You also want to promote your products and services that have the highest profit margin to drive the most revenue to your business. Otherwise, you might find that your company is still barely breaking even despite sales growth and marketing budget cuts.
A member of the marketing team should have a seat in finance meetings and sales strategy discussions. This will help you better execute C-suite goals and make smart decisions within your department.
Communicate Clearly With Your Team
It’s understandable that your marketing team might be stressed during this time. Not only have your employees built thriving campaigns that they are passionate about growing, but they also might be worried about other cuts to come. Part of your leadership role involves communicating clearly so your team feels confident.
It’s okay to be transparent about the budget cuts and review specific goals and numbers with your staff. This way, everyone can work together to develop solutions and creative strategies moving forward. Some of the best ideas might come from more junior employees eager to help.
Everyone will likely have to make sacrifices when the budget is getting cut. By approaching this as a team effort, you can maintain a sense of community and a positive workplace culture.
Outsmart — Don’t Outspend — With J&L Marketing
No one wants to be told that their budget is getting cut, especially if you have a thriving marketing team supporting your dealership. If you aren’t sure where to turn to save, talk to our team at J&L Marketing. We will never suggest spending more than you can and will always look for new ways to help you save. We can help you hit your goals — regardless of your budget.
Reach out to our team today and let us promote your dealership in the best way possible so you can outsmart your competition.
