Six powerful ways to reduce marketing costs in a recession
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As the recession bites there is daily news about CFO’s bearing down on marketing with sharp implements and slashing marketing budgets to the bone (see earlier post).
Kim Collins at Gartner has just released a report which confirms how much pressure marketing is under, but does provide some great advice for managing through the downturn.
In her report, “The Top Six CRM Marketing Processes for a Cost-Constrained Economy,” Collins warns against blindly cutting marketing during tough times, as this impairs growth when the economy improves.
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Careful invesment can pay off in a downturn
Her advice is to accept that some costs may need to be cut, but also to invest carefully in specific areas to help manage through the downturn. Careful investment in certain areas can help manage costs and visibly prove return on investment (ROI). “One of the things [that] might surprise an organization — and maybe some marketers — is that you can actually spend to save,” she says.
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Payback must be very quick
Collins view is that it is important to run initiatives that get a very fast return. “The reality is that people cannot afford to spend a lot of money and not get results till 2010, 2011, or 2012,” she says. “They can’t afford to wait that long.” She suggests that marketers focus on just two types of project; one that helps the organisation grow, and another that drives cost and resource savings. Whichever type of project they undertake, marketers need to ensure two things:
- fast time-to-implement and
- quick time-to-ROI.
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Six activities to add value
Marketers with little or no budget can still drive real value. Collins says that those organisations should look internally to improve six key marketing processes. In fact, several of her suggestions - especially creative production management and marketing fulfilment - can help marketers find more budget by exposing pockets of wasted resources.
Collins’ six marketing processes to focus on are:
- Lead management: Gartner predicts that organizations that implement and automate lead management processes this year will increase revenue by more than 10 percent. This means closing the gap between marketing and sales to follow up leads that are better qualified, resulting in better opportunities.
- Retention management: When money is tight, it’s less expensive to keep an existing profitable customer than it is to go out and find new ones. Customers acquired in a recession are likely to be less profitable anyway.
- Online marketing: “Now is not the time to cut online-marketing spending,” Collins writes, “Now you want to reach and engage your customers,” she says. “It’s how you engage with them in the online experience.” Collins predicts that companies which invest in new online-marketing processes will see at least a 10 percent increase in revenue within six months.
- Creative production management: This is an area marketers ignore as they look for ways to cut costs. Streamlining and automating the creative process can expose inefficiencies and can also reduce a marketing project’s time-to-market. Software can eliminate “busy work” and essentially allow a company to reduce its budget without a loss of effectiveness. Gartner says that organisations which automate creative production will save more than 15 percent on creative advertising budgets in as little as three months.
- Marketing fulfillment: These solutions avoid spending money on wasted collateral by reducing printed material and associated storage costs. Marketing teams move to on-demand printing and get up to a reduction of 5 percent of waste within three to six months.
- Budgeting and spending management: “Improving marketing’s accountability is required to convince the finance department of the value of marketing’s programs,” Collins writes. The more that marketing can standardise financial processes and demonstrate good financial management, the fewer budget cuts they will experience.
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#4 - creative production management… how online proofing can drive savings
Collins’ advice is to start by cutting waste and protect existing marketing programs, and this is where initiatives like online proofing can kick in.
The amount of time wasted by what Collins calls “busy work” can be huge in any project involving review, approval and sign-off of design and marketing material. With the emails, FTPs, attachments, comments, CC’s, replies and chasing needed to get just one marketing piece completed, the hours wasted for project managers as well as reviewers can quickly run up. Multiply that across several pieces per project and several projects per month and you can soon see hundreds if not thousands of dollars wasted. The final effect is that project delivery times are longer because each revision takes longer and there are more of them.
Online proofing can be implemented very quickly, usually within a fews hours, and the payback can be almost instant. By implementing a simple, low-cost review and approval tool, all work for review is put securely online. There is one single version of a design or document to comment on, and reviewers can see each others comments in real time. This cuts down the time taken to collate comments and to resolve different viewpoints. If the solution includes version control, reviewers can compare latest versions with older ones without having to trawl through email attachments and cluttered desktops.
In a nutshell, with online proofing:
- Each round of proofing takes less time and so costs less.
- There are fewer rounds of revisions, so projects are delivered faster.
With online proofing tools starting at just a few dollars a month, it doesn’t take much time saving to quickly get that vital return on investment.
Ramen girl says:
Very interesting article. I really like the 6 main tips, as customers retention has never been so important. With a lot less buyers, they can be picky and choose where they want to shop, so keeping them, even if you have to run an extra mile is often worth it. This article is great food for though!
September 14th, 2009 at 10:34 pm