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So, there's a global pandemic going on. Maybe you resisted cutting your marketing budget in the spring, thinking it will blow over soon. But now as fall is here and a second wave of coronavirus cases looms, you're starting to feel the pressure to save some money by cutting your marketing budget.
Put down the giant fake-check-cutting scissors and let's have a chat.
First off, let's not forget that some sectors are doing better than ever during the COVID-19 outbreak: ecommerce retailers, logistics and supply-chain companies and online education businesses, to name a few.
Marketing during a pandemic may feel counterproductive, but it isn't. It keeps your brand top of mind for customers who can buy from you now, and also those who want to, but can't afford it yet due to the economy, job loss or other effects from the pandemic.
In short, if you stop marketing now, who will remember you when it's time to buy again? No one.
Fear not, my melancholy marketer. You can save money and market your company effectively at the same time during a dumpster fire worldwide pandemic. Here's how.
Your marketing budget is everything you spend on marketing and advertising initiatives, from content production to graphic design, paid media spend and everything in between.
What's interesting to note is how different marketing budgets are across different kinds of companies.
For all, your total budget should be a percentage of your gross revenue.
For business-to-business (B2B) companies, it's typically 2%-5% of overall revenue and for business-to-consumer (B2C) companies, marketing budgets are often 5%-10% of revenue, according to data from the Business Development Bank of Canada.
Why the discrepancy?
B2C companies typically have to spend more to attract a consumer audience. There's simply more competition to capture attention for things like laundry soap and fashion brands and you've got to keep up a steady flow of paid media, television spots, content and social media advertising to keep your brand top of mind.
B2B companies need to spend on advertising and brand-building activities too, but it's often much more targeted. For example, while it may make sense for a fast-food chain to run TV commercials, it doesn't really make sense for a specialized project management software to have a 30-second TV spot without even knowing if any project managers out there are watching, right?
Methods of attracting B2B customers are much more targeted. Take Google ads, which can be targeted by keyword, or Facebook ads that are aimed at specific employers or job titles. B2B marketers have more methods to pinpoint the exact customers they want, meaning they have to spend less overall to attract their ideal audience.
Marketing budgets are different based on company size as well. Experts have different opinions — some advising a 2%-3% budget — but the general rule set by the U.S. Small Business Association is 7%-8% of revenue for companies earning less than $5 million annually.
Marketing budgets vary widely by sector, too. Technology companies spend on average 15% of revenue on marketing, whereas banking and finance spends an average of 8%, according to a survey by Deloitte and the American Marketing Association.
Don't get too hung up on the numbers. While it's good to compare yours with the industry average, it comes down to what you can afford. If you sell high-ticket products or services, you're probably going to spend more than average to acquire the customers with enough money to pay for them.
And if you're a startup or very niche company, you're probably going to spend less.
Whatever you spend, don't cut it because of coronavirus or you'll find yourself up the creek without a paddle after the pandemic ends.
I know, it's tempting. Why wouldn't you want to save money right now?
If they can do it, why can't you?
Simply put: They've earned it and you haven't.
Do you think people will still recognize the names Google and Airbnb a year from now? Yes, they will.
Will they recognize Beezkneez, your B2B (or bee-to-bee... sorry) all-in-one business management platform for beekeepers? No, they won't.
Google and Airbnb can take time away from marketing because of the enormous amounts of energy and money they've poured into it for decades. They are household names and have earned that right, through constant brand building and advertising.
You, my friend, may have a solid company capable of amazing things. But cutting your budget now will only hurt you in the long run, unlike the big guys, and here's 4 reasons why.
Marketing isn't only about getting new leads and closing deals, it's part of your overall customer experience. Both leads and current customers get an experience from you, whether it's through content marketing, social media or personal interaction with sales or support staff.
Without those constant touch points your customers are used to having, their perception of your brand will slip. The connections you've worked hard to build, especially with things like content marketing, will disappear almost overnight as their memories of past experiences with you fade into the background.
Why would you have worked so hard at it until now just to stop and have it turn to ash, all to save a bit of money?
No company has unlimited financial reserves and yes, the coronavirus pandemic is testing the financial security of small and large businesses alike. It's a challenge not all will survive.
But slashing your marketing budget in response? It looks desperate. (Unless you're one of the big guys I talked about earlier.)
And what's a surefire way to turn people off whatever you're selling, whether it's a used car or a software package? Desperation.
Find other areas to make cuts if necessary, such as staff lunches and parties or executive bonuses, and leave your marketing budget alone. I'll cover how you can shift your marketing message to fit the current global situation instead in the next section.
If customers don't see you, they forget you.
If they forget you, they'll choose the other guys when it's time to buy again.
While you scrounge a few dollars of savings, your competitors are snapping up the Google Ads keywords you've put on pause. They're first in search engine results and you're relying on organic traffic alone.
While you're pinching pennies, your competitors are launching community outreach initiatives to help displaced tech workers find new gigs, and creating a buzz about it on social media. And you've stopped posting because you've stopped making new content of any kind.
I'm sure you see where I'm going with this. Cutting your marketing budget now will only be a favor to your competition.
Think you can cut your marketing budget now and then simply flick the light switch back on after the pandemic is over? When will that be, a year from now? Two years? More?
You know how fast the marketing landscape changes. What you pushed pause on today won't be relevant a year or 2 from now.
You'll be the startup again, needing to focus on the basics of growth marketing to get any traction going and you know you'll have a long uphill climb to get back to where you once were, pre-COVID-19.
Turning off your marketing now is like leaving a car engine to sit idle for years in a dusty old garage. When you want to hit the road, it'll probably be dead and not start. Or, at the very least, require a hefty (and expensive) jump start to get going.
Why ruin all your progress up until now to save money, when you'll be spending double to get it all moving again?
The downtime of lost visibility will haunt you for years and the leads won't come pouring in the second you turn that budget back on. Leads and sales take time, and if you start your marketing budget up again too late, your company may run out of time (and money) before you realize it.
So if you shouldn't cut your marketing budget but you need to dial back a bit, what are you supposed to do?
The answer isn't less marketing or laying off the marketing department. It's different, scrappier marketing.
There are many alternative marketing strategies that are working extremely well during the coronavirus pandemic. Many of them rely on social media, with so many more people home much more often, whether working remotely or just not out on weekends.
Additionally, with so many people home and consuming more content, if you can double-down on your current content marketing budget, do it. The payoff will be worth the extra investment.
Live video converts and not just for B2C brands. 59% of B2B executives would rather watch a video than read an article, according to data from WordStream.
Plus, it's one of the best marketing strategies to implement if you're trying to save money because it's free. Instead, use your budget to produce high-quality video content and then get it out there for free on these platforms.
Live video is typically used to show more informal content, like a behind the scenes of your company.
But you can also use live video to:
Big companies are embracing live video as the pandemic continues. Chipotle has led margarita making workshops, fitness studios are holding live workout classes, and pet ecommerce retailer Chewy holds regular live Q&A sessions with vets so their customers can ask questions about their pets for free.
All creative uses of a free marketing tool that goes a long way toward building trust and relationships with your customers.
If live video isn't something you want to pursue, or even to complement it, a YouTube channel is a smart marketing move for 2021 and beyond.
YouTube is the second most popular website in the world, after Google. Additionally, 39.4% of Americans say they are spending “significantly more” time on YouTube since coronavirus lockdowns took effect in March 2020, according to Statista.
This presents a huge opportunity for starting a content marketing strategy with YouTube videos.
Growing a channel takes serious work — and often time — but it's worth it. For companies who have an active video marketing strategy, 80% said videos directly led to higher sales in 2020, according to a report by Wyzowl.
A few tips to find success on YouTube:
Creating a sense of community should be a major goal of all your marketing but for this, I specifically mean create an actual community. What and where that is depends on your market, but examples could be a private customers-only Facebook group, LinkedIn group, Slack channel and so on.
First, think of where your customers hang out online. Then, think about what makes sense for your business and how you'll deliver valuable content in your community. A B2C cosmetics company probably isn't going to make a Slack channel, for example. But Slack is a perfect fit for B2B companies, especially those in the tech space.
That's the how, but why would you want to do this?
In short, it deepens your customers' connection with you in a time where connecting face-to-face is mostly impossible. And, it continues to build trust and provide value in what continues to be — yes, I'm going to use the cliche phrase every marketer is using now — an Uncertain Time.
That translates to higher customer retention and loyalty now and in the future.
No matter what you do, you can't ignore the coronavirus crisis or its impact on your customers' daily lives. Your content needs to reflect current world events.
With stay-at-home orders in place, many people took to completing home renovations they've been putting off for years or building new work-from-home spaces. Home Depot, whose sales are up 23% over a year ago, saw an opportunity.
Home Depot shifted much of their marketing focus to relevant content by rolling out email campaigns informing customers about their library of more than 2,000 do-it-yourself (DIY) projects and tutorials on their website, as well as their own branded mobile app. Since lockdowns hit, their email engagement and subscription growth rates have tripled.
They realized people were looking for DIY project content and they delivered it. Simple and effective.
If you're not sure what your customers want in this new era, just ask. According to research by Edelman, 1 in 5 B2B companies are directly asking their customers what they want.
That's just bananas. Why try to mine data from a bunch of different sources when you can ask the actual source yourself? Be upfront. Just ask.
With most in-person events and conferences prohibited, virtual is the only option.
The cancellation of Mobile World Congress 2020 in February made headlines as one of the first major global conferences to be cancelled because of the coronavirus. At the time, it seemed shocking but now we're all used to it.
The top conferences of 2020 have all been virtual: Adobe Summit, Content Marketing Conference, MozCon and more.
Many B2B companies rely on business conferences and networking events to reach new customers for their products. But you know what's great about virtual events? Suddenly you don't need to rent a whole hotel and shell out tens of thousands in catering costs to host an event: You just need a Zoom subscription and a decent camera.
Sure, creating a virtual event takes a lot of planning, marketing and roll-up-your-sleeves work, but it can go a long way in creating buzz online of people sharing your name across social media, learning about your company and subscribing to your content in the future. That's a great use of your marketing budget dollars.
Put away the red pen and the spreadsheet. Now isn’t the time to panic and slash your marketing budget.
The answer to keeping your current customers happy and attracting new leads in these pandemic times isn't to cut marketing spending, it's to market in new ways and tailor your message to the times we're in.
Open up and look for ways to connect with your customers through live, virtual events or webinars. Start marketing on a new channel, like creating a YouTube channel or launching your Instagram. Do Q&As with your audience.
Whatever you do, don't go silent. Otherwise when your target market has recovered their own businesses after the economic recession and are ready to buy again, they won't be knocking on your door.
If you cut your marketing budget now, your competition will win, not you.
Need help navigating a new marketing strategy during the coronavirus pandemic? Hire our team of marketing experts to pivot your message and grow your business, through the pandemic and beyond.