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5 Reasons To Cut Your Marketing Budget

Megan Effertz
October 8, 2020

I had spent my entire corporate career fighting for my marketing budget. Then I became a President of a strategic marketing agency. After working with clients,  I realized some companies should cut their marketing budgets. Seems counter-intuitive that an agency would suggest that companies cut their marketing budgets, right?

Wrong. When I was on the corporate side I spent months strategizing and partnering with sales and business unit leaders to determine goals and budgets and then develop strategic plans and marketing strategies to meet those goals. After we’d set plans in motion I’d monitor and adjust along the way to make sure we hit our goals. I thought this was common practice. What I’ve learned on the agency side is not every company spends the time or money they need to determine what their goals are, let alone to create a plan and marketing budget to get them there.

So yes, I do think some companies should cut their marketing budgets because it is a waste of resources. I’d recommend companies cut their marketing budget if any of the following 5 reasons apply.

5 reasons to cut your marketing budget

1. You can’t articulate clearly what you are trying to accomplish

Growing revenue is not a clear enough goal. What revenue do you want to grow and with whom and in what timeframe? Setting these parameters will help determine what needs to be done, by when, and how much investment is needed to make it happen.

Often times instead of getting prescriptive about a goal, businesses will say, “let’s grow revenue”. To accomplish this, they task marketing with promoting everything which leads to a bunch of marketing activities with the spray and pray mentality. Although marketing will be busy, this will not get a lot of results. My mantra has always been results not activity.

These businesses feel good about marketing because they are doing so much activity. Often times I’ve found that they could eliminate a good portion of what they are doing and be more focused to achieve greater results. Let me be clear. Audiences are bombarded with messages. You need to find them when and where they are looking for information and lead them to you. That takes time, repetition, consistency and planning with a clear end goal in mind.

2. You are reacting instead of executing a plan

I’ve heard too many times that a company’s marketing strategy is to grow revenue. Growing revenue is not a marketing strategy, it is a goal. How you are going to grow revenue is the strategy.

Communicating a goal to your sales & marketing teams instead of strategy is like saying, “We’re going to Paris!” and not telling anyone how you are going to get there. Sales and marketing employees will interpret this to mean different things causing conflict and unnecessary resource consumption. For example, Sales might book flights to Paris, France ASAP while marketing might charter a bus to Paris, Ohio.

You need a marketing strategy to keep everyone focused and moving towards the same goal. This helps people understand how you are going to achieve the goal and what their role and responsibilities are along the way. It also helps in determining a budget to support the strategy which will allow you to decide if the ROI is worth it. Having a clearly defined strategy to meet a clearly defined goal also shifts culture from activity-focused to results-focused.

3. You don’t have buy-in from Sales

This is probably one of the most critical components to running a successful marketing organization. Get buy-in from sales for your marketing strategies. If your marketing strategies aren’t aligned with 1) the way the customer buys or 2) the way sales sells, it will die a slow and painful death. Make sure to take the time to work with sales. Solicit their ideas, make them part of the process, share concepts in the preliminary stages of development. They know the market and how the customer will respond or how the lead will flow through the sales cycle. They will let you know what will work and what won’t. You don’t have to take all of their ideas but instead use the information to make stronger marketing strategies. Plus, they are more likely to follow up on the leads marketing generated if they are aligned with the strategy.

4. Your marketing budget only funds part of the marketing plan

If you have a solid plan and have aligned with sales but only get part of the plan funded you need to re-evaluate. You have to re-evaluate the plan and reset expectations of what can be accomplished with a smaller budget. Sometimes the plan still might work if you cut corners but often times it just becomes marketing activities that don’t drive results.

Cutting out key pieces to move a buyer through the sales process to save a few dollars up front undermines the strategy and diminishes the return. If you’re going to hack a plan to save some dollars just cut the whole plan so you don’t waste dollars that won’t give you the results you wanted.

5. You want your competition to win

The last reason I’d ever recommend to a company to cut their marketing budget is if they wanted to help the competition get ahead of them. We all know that marketing budgets are the first thing to get cut when companies aren’t hitting their goals. Marketing is viewed as an expense, not a profit center like sales is. However, when you need more sales, cutting marketing is the last thing you should do. In fact, when markets are down and the competition is cutting marketing too, I say reinforce your commitment to marketing. It’s times like these that there will be less noise in the marketplace and your message can be louder and more impactful. Cutting your marketing budget only makes it easier for the competition to steal market share from you which is hard ground to make up.

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