The topic for this month’s newsletter and blogs is focus and persistence on your company’s goals for 2023. The year has started on shaky ground—massive layoffs from major companies such as Microsoft and Amazon, amid an economic recession. The only way companies will make it is to persist and keep focused.
A company’s income starts at the beginning with marketing. No matter what is happening in the environment, it is vital that the marketing machine be kept very much alive.
Making a Victim of the Marketing Budget
In uncertain times, a company will often cut back on budgets. For some departments or activities, this makes sense. For example, the company could cut back on its travel budget and make more remote sales appointments, instead of in-person, and the appointments would still occur. Other budgets, such as customer entertainment, could also be cut back, finding other ways to make customers happy.
Making cutbacks blindly across the company does not make sense, however. One budget that is almost always a victim of cutbacks is marketing. If any department or activity could be singled out that should not be cut back, especially in unstable times, it would be this one. Why?
Marketing Effects
To answer that question, let’s look at how marketing impacts the company’s revenue.
Marketing materials are the first interaction your prospects have with your organization. They are what causes interest in your products or services, and brings prospects in the door, literally or figuratively.
In sales terms, the activity of prospects coming in is what is known as lead generation. In some companies—very few today—salespeople must generate their own leads. But in most enterprises, salespeople rely fully on the leads generated by marketing.
Incoming leads are the only way salespeople survive, and therefore the only way your sales survive. If you graph your overall marketing activities, you’ll see that sales follow at a predictable later date. When there’s an increase in marketing, an increase in sales follows in the time it takes salespeople to convert leads into opportunities. The opposite is also true—when marketing activity drops, the resultant leads also drop, leading to an eventual drop in sales.
Making Headway in Unstable Times
Now, let’s look at what a company is trying to accomplish in unstable times such as those we’re currently facing.
The impact that uncertainty has on a company is the same impact uncertainty has on anything—people tend to withdraw and protect what they have. In commerce, buyers become more cautious. That means sales require more care and effort.
In such times, a company tends to come down hard on its salespeople, pushing them to sell so that the company can survive the tougher times. But now let’s look at what salespeople are counting on to make sales—leads. If you want your salespeople to make sales and keep the company alive, they must have leads.
If your company is cutting back on its marketing budget, it’s cutting back on its lead generation. In that sales follows leads, as we demonstrated above, the end result of reducing your marketing budget is a reduction in your sales. No effort to remedy this by putting more pressure put on salespeople will fix that. That is certainly not the direction your company is wanting to go!
Put The Hammer Down
The answer to uncertain times is never to react by cutting your marketing budget. The answer is to remain proactive and keep your marketing efforts robust. In fact, given that buyers tend to be more cautious in unstable times, it makes sense to spend even more on marketing than in “normal” times.
Put that hammer down on marketing, keep feeding leads to your sales team, and keep your sales expanding.
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