© Natee Meepian | Getty ImagesNatee Meepian | fake picturesAre you sure your business can survive the next recession? In 2022, small business owners' revenues increased by 87%, but their profits fell by 4%. The reason? Inflation has forced businesses to raise costs to cover operating costs and compete.
The good news is that your marketing plan will help you gain traction in an uncertain economy. Here's how to manage your marketing budget during an economic downturn.
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Define specific marketing objectives
Start by reviewing your overall business strategy. What goals are you trying to achieve with your marketing campaigns? These goals can help you decide which marketing methods to focus on and can also be used to measure the effectiveness of your marketing campaigns.
Many business owners stress the need to set "reasonable" goals. These objectives are:
- Specific
- Measurable
- are available
- realistic
- Question
For example, a good goal might be to increase your customer conversion rate by 15% over the next six months. This goal is specific, measurable, and includes a clear timeline, making it easy to determine the success of your marketing efforts.
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Focus on what you can measure
You may need to cut back on your marketing budget when times are tough, but that doesn't mean you have to ditch your advertising strategy altogether. Instead, strategically eliminate marketing spend that doesn't have an immediate impact.
If necessary, start reducing costs that are not directly related to measurements. For example, it is difficult to measure the results of a notoriety campaign. At this point, it may make more sense to focus your resources on marketing strategies that have clear goals and objectives. When it comes to marketing, spend your time on the following:
- customer interaction
- unique site visitors
- conversion measures
- failure rate
- Time spent on site
- average customer sales
These metrics can help you measure the effectiveness of your marketing campaigns and you can use the data to improve your strategy.
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do your research
How well do you understand the current habits of your target market? Learning how to manage your marketing budget also requires understanding cultural trends that will help you get your message across.
During the 2020 pandemic, it seemed natural to develop a marketing budget focused on digital advertising and social media campaigns. But now that restrictions have been lifted, your customers can return to in-person events.
The money you spend on Facebook or Google ads is better spent on conferences or trade shows.
As your social media following continues to grow, you need to identify the best platforms to reach them. While Facebook is a broad approach, platforms like Instagram, Snapchat, or TikTok can help you reach a younger audience.
By doing your homework, you can adjust your marketing strategy to match customer behavior and get the most out of every dollar spent.
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Keep control of your ROI
Every dollar counts. An uncertain economy will force you to be more careful about how you manage your marketing budget. Now might be a good time to review your marketing goals and assess the value of each method to you.
If you already have strong marketing metrics (see above), you'll have a clear path to gauge your return on investment (ROI). For example, you can see how much you're spending on your digital advertising, then compare that amount to your click-through rate to see if the benefits justify the cost.
This knowledge will allow you to eliminate marketing expenses that do not bring you clear and measurable results. It will also allow you to reallocate your marketing funds to activities that bring the most benefit to your business.
Keep your budget flexible
As you learn to manage your marketing budget, you'll want to leave enough room to take advantage of unexpected or seasonal opportunities. Allocating 15-20% to creative campaigns can give you the flexibility to adapt to changing circumstances.
In other words, instead of having a rigid marketing budget model, give yourself room to adapt and change. Your business may thrive at certain times of the year, or you may introduce a new product line that helps you tap into an untapped market.
The goal is to have a budget model that allows for creativity. If you spend every dollar on existing marketing strategies, you risk missing opportunities later.
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Cooperate
As the business grows, they run the risk of isolating components in different “bases”, making it difficult to manage budgets across the organization. As a result, the business loses efficiency and agility and lacks the data needed to make the decisions that drive the business forward.
Working as a team can ensure that your marketing goals align with the overall business vision. Small businesses can do this relatively easily because their small size helps them keep their goals narrow and specific. But any organization may need input from multiple departments to promote marketing initiatives that help the company achieve its goals.
Marketers working in these broader environments will also need senior management approval before implementing a marketing plan. This keeps everyone in the organization on the same page about the future of the business and the path it will take to get there.
Evaluate and adjust
You must constantly evaluate the success of your marketing plan. By sticking to measurable and achievable goals, you can use data to guide decision-making and business development.
But don't forget to monitor your data throughout the year. Surely you can convert 10% of those who see Facebook ads today into customers. But will this conversion rate stay the same?
Tracking your pass rates can help you make course adjustments based on changes in customer behavior. Staying on top of changes will help you stay on top of your marketing efforts.
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Watch out for the competition
What are your competitors doing in this time of economic uncertainty? Your goal shouldn't be to imitate competing companies, but competitor analysis can give you insight into how other companies in your industry are weathering the economic storm.
For best results, pay special attention to businesses that share your geographic area or even your target market. This will give you a better idea of how other businesses are growing even when the economy is down.
Again, your goal shouldn't be to duplicate your competitors' efforts, but learning their methods will help you refine your approach to the environment.
follow the path
The good news is that there may be hope on the horizon. Economists estimate that the level of inflation could normalize between 2023 and 2025. Until then, business owners may have to wait longer, so it is important to develop a clear plan on how to manage your marketing budgets.
These tips can improve your overall resilience to economic uncertainty, but they are also good strategy for the functioning of the economy. Adapting these techniques and incorporating them into your organization's marketing plan can increase your effectiveness and success, and allow your business to thrive for years to come.
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