Today we teach you how you can still score a strong marketing budget in a recession. We also cover:
How to cut a marketing budget the right way
How to make the most of your marketing budget
Hacks on saving money on your marketing spends
Know how your budget decision-maker ticks
Optimize your current campaigns for payback period
Reduce your ad budget for branded keywords
If your organization is facing a hiring freeze, propose to outsource those tasks to freelancers or contractors instead of employees
Narrow your focus down to best-performing market segments, geographies, product verticals, or customer segments.
Negotiate with your tool vendors for annual discounts, long-term contracts, or retainer prices
Repurpose the top 20% of the content or pages that are performing well.
Understand the motivation behind the budget allocation
Eli advises how as a first step, one should understand the motivation of the person allocating the budget –
“I think anybody who wants to be successful at really maximizing budget and maximizing their effectiveness is to understand the motivations of whoever is giving that directive.
So, for a public company, it might be the investor, for a private company, it might be the VCs, for a very small company, it might be the small business owner. So, it really comes down to how you position yourself most effectively and utilize that budget so that person is the happiest and feels like you're achieving their goals. It's not about I saved you a thousand dollars.”
Take a look at the payback period of your customer acquisition costs
Kevin shares how brands are becoming mindful of a campaign’s payback period as they look to save costs –
“Right now, especially in the SaaS space, a lot of companies are looking at their payback period – (which is) how much money they spend to acquire the customer and how long it takes for those customers to spend enough money with the company so that they can recoup the acquisition cost. So, companies are looking to shorten the payback period – which basically means that they try to acquire the same customers with less money.
(For this) you may want to look at which campaigns drive the most customers. Where do we spend more than we get back? That sounds like something you would do anyway all the time, but it's not true. (That’s because) for the last maybe 15 years, the default has been growth – to just get in as many customers as possible. You still want to look at the payback period, but it's not the deciding factor.
But now, it's a deciding factor. So, companies are trimming the edges of their ad budgets. They're trimming the fat and trying to reduce the spend it takes to get customers.”
Reduce spend on your branded keywords
Kevin advises reducing the budget on branding during tough market conditions –
“One of the best practices that I noticed is to just reduce the spending on your brand. Companies spend a lot of money on bidding on their brands in Google Ads. The margins or the net benefits of that are not always that great.
I think now is a good time to see, – hey, what happens when if we stop bidding on our brands? Or at least what happens when we cut our brand spend in half? How many customers do we still get versus how many would we lose potentially?”
Outsource more by hiring freelancers
Eli advises hiring freelancers or contractors instead of full-time people —
“If you've been told that you have a hiring freeze, instead of not hiring people, just hire freelancers.
I don't think there's a chance that the companies that went through the big layoffs, Google, Facebook, and all the other companies are not hiring freelancers or contractors. There are still jobs that need to be done and unfortunately, they need to cut full-time employees to make the street, their budget, and CFOs happy, – but they still need someone to do it. So they shift that budget over to freelancers.
When you agree to hire a freelancer and you make the pitch for a freelancer, remind them that it would be ideal if you would actually have a full-time employee – and this is a compromise to have the freelancer. So hiring freelancers, even if they cost more money, that's my favorite hack in a tight budget environment.”
Focus on impact and efficiency
Kevin advises brands should double down on what is already working for them. He explains how you can apply this across customer segments, resource management, target geography, market segment, and verticals –
“Biggest hacks for doing more with less is just to refocus on what works and refocus on impact and efficiency.
So what that means is – you can ask everyone to track their time, or you can just do the work yourself. See where your time goes, and then just do less of the things that don't yield results. You can adopt that philosophy as a single person, as a team, or as a whole company. It's basically refocusing the organization and refocusing the team.
This can also apply to customer segments. Many companies maybe start with an SMB focus, then go up to mid-market and eventually enterprise – and (these changes) shift focus, costing a lot of money in efficiency. Maybe now is the right time to say, – hey, let's refocus on our most profitable market segment, or let's focus on just one market segment.
It can also be geography, where you say, – let's not focus on 30 countries, but maybe five.
Or it can be a vertical where if you serve several industries, you just go down to one.
My favorite story on focus is about Peter Theil and PayPal.
So at PayPal, Peter Theil was known for having a very extreme dedication to focus, and he would expect every employee to have a number one top priority. He would only talk to employees about their number one priority, nothing else mattered.
It's a great example of how you force a team, an organization, or a company to really just focus on the most important thing and make sure that that works flawlessly.”
Pay in advance for critical tools you need
Eli advises saving money on important marketing tools by purchasing their annual or long-term contracts. He also shares a hack on negotiating a retainer price –
“Layoffs may or may not have happened, but you can prepare for it. So one thing that I've always done when I'm afraid that the money might disappear is I'll go and pay in advance for things.
So, Ahrefs is our sponsor over this episode and I'm sure that Ahrefs would love it if you would buy their annual plan if you're currently on a monthly. I'd recommend you get their enterprise – it's an awesome tool, especially if you compare it to the hundreds of thousands of dollars you'd have to spend on unnamed enterprise SEO tools.
But their enterprise is $10,000 a year if you pay annually, whereas it's a little bit under $12,000 a year if you pay monthly. Now, suddenly if your CFO says, – oh, we can't afford a thousand dollars a month anymore for this tool, or show me how having this tool provides us value, – that's not a conversation you want to have. So if the budget's there, you can point out to the CFO, – oh, I'd like to pay in advance and save us a couple of thousand dollars.
Do that with all the tools you have that you're afraid might get pulled out of your toolbox by paying for them in advance or signing longer contracts.
On the flip side, if there's a tool you're not really using but you'd like to use and you think it's too expensive, this is the time when you can go back to the software, person, or vendor and say – I have less budget this year and cannot afford to pay this price. There may be retention pricing available if you just ask for it. Obviously, you have to be prepared to cut it off and say, well, if I can't afford it, I will not pay for it.
So, just make your stack more efficient. Pay for the tools you need. Get better pricing. Pay annually. Get those contracts out there.”
Repurpose the top 20% of your content
Kevin advises brands to focus on high-performing content and repurpose them –
“A great way to do more marketing with less budget is to just repurpose content.
A lot of times marketers don't think enough about what actually drives results. And there's this interesting 80-20 rule that you find in most marketing data – where maybe 20% of your blog articles drive 80% of email signups or 20% of landing pages give 80% of leads, right?
One good thing you can do is to just look at or think about how can we repurpose these 20% of our content or pages. Maybe you can create a video out of one of your best-converting blog articles, or maybe you make a podcast episode or maybe you post about it on social or you send it as an email campaign, or like a drip sequence.
So content repurposing is one of my hacks. And you want to focus on the few things that already work well, and then think about how can you squeeze more juice out of the fruit.”
How the culture at Payal gave importance to focus - Quora answer by Keith Rabois
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Eli and Kevin