Brighter Group’s Steve Dunne says marketing costs are easy to cut when the going gets tough, but firms risk becoming stuck in a commercial pit with no means of escape
Picture the scene.
You’re in a deep pit with no obvious escape route. You can see daylight at the top of the hole but it’s out of reach. In the pit with you is an axe, a wooden ladder, a set of climbing hooks and a rope.
What would you do next?
Would you bellow for help at the top of your voice for hours on end? Would you chop up the ladder and set that, and the rope, on fire to make some heat and light. Or would you use the tools you have in the pit to escape?
The answer, one would hope, is obvious. You would use the tools at your disposal to escape the pit.
Yet, in the past few weeks, as budgets are being set for the forthcoming financial year, I have been exposed, across a number of meetings, to travel executives from different segments of the sector debating the reduction of their marketing budget as a cost-cutting exercise to “keep overheads under control”.
And, increasingly, I find that that the executives who most bemoan the lack of editorial coverage their product achieves, or the struggle their service has in getting its message to the consumer, are the same executives who see PR and marketing as merely an overhead, one to be cut at every opportunity.
Now, as a businessman myself I am of course acutely aware of the need to keep a tight grip on one’s cost base.
However, I am also aware that if I don’t invest in my marketing and PR then I am going to struggle to get new business and to compete effectively with my competitors.
Put simply, I believe your company’s marketing budget should not be treated as an overhead.
In my view, using the phrase ‘marketing budget’ is deluding oneself. Budgets are easy to cut when the going gets tough – indeed there is an almost macho thing about saying “we don’t have a very big marketing budget” or “we need to cut the budget”.
However, if you use the phrase ‘investment’ instead of ‘budget’ one immediately sees a change of mind-set in a brand.
“We need to reduce our investment in promoting our product” is a phrase that demands far more stringent debate at senior level then “let’s cut the marketing budget”.
Who would you as a customer or shareholder have more faith in – a brand that is not investing in its profile, reputation and awareness, or one that confidently is?
And let’s remember: one’s marketing budget is not just for promoting your product to a new market – it’s as much about reassuring existing customers that they have made the right choice in buying your product; that buying your product says something about them – to them and to their world.
So, as you sit around the planning table working out next year’s financial plan, try to insert the word investment in for budget and see the difference it makes to the approach your brand takes in promoting itself.