When push comes to shove in a tight economy, many small businesses opt to trim down their marketing budget – or to cut marketing out of their business plan entirely. Contrary to popular belief, though, a marketing budget isn’t a luxury; it’s an essential investment toward reaching your business goals. A precise marketing budget, with clearly defined spending strategies, ensures that your efforts make the greatest impact for the resources you have – and for that reason, it’s an indispensable part of a successful development plan.
A steady customer stream.
When funds are limited, it’s easy to expect that your current client base is enough to sustain your business without additional marketing – and yes, according to Forbes, it’s nearly 7 times more costly to gain a new customer than to retain an existing one. Remember, though: if you’re trying to cut back on expenses, chances are at least a few of your customers are too. Plus, even loyal customers can relocate, change job schedules, or go through other lifestyle changes that make it unfeasible for them to visit your business regularly. Allocating even a small budget to continued marketing means you’ll be able to reinforce your current profits with at least a few fresh prospects.
An edge over the competition.
If your competitors cut back on their marketing spending, that doesn’t mean you should do the same. Keeping up communication with prospects and customers can go a long way, especially when your competitors are going silent. Numerous studies, in fact, have suggested that increasing marketing funds during a recession can help businesses get ahead of the game (source: MarketingProfs). Every business is different, of course – but before you decide to cut your marketing budget entirely, consider whether doing so would make strategic sense for your customer trends and sales processes.
Better insights into your customer process.
Market research is essential to understanding your customers’ decision-making cycles, such as how they’re finding your business and what challenges they’re looking to solve. What’s more, monitoring the performance of your website and other pages can shed light on whether the money you have spent is helping your business. Even if you don’t budget for new marketing efforts, it’s a good idea to invest in a reliable measurement system to keep track of your current return on investment, and to form new strategies for the future.
No business can successfully move forward without a consistent plan. While it may mean rethinking your sales and pricing processes in a tough market, a strategic budget is the first step to maintaining brand awareness and keeping up a steady business momentum.