There’s no denying the fact that the current business landscape is extremely dynamic and volatile, especially because even now, in early June of 2020, we still have no clear view of an end in sight.
Naturally, this shaky climate has led to a mass wave of budgetary and spending cuts. According to recent research by Gartner, 65% of CMOs and marketing leaders expect to see moderate or significant decreases in budgets, with 33% expecting to see significant cuts.
When making tough decisions for the future of your business, it’s important to take an even-keeled, methodical approach to ensure sustainability. This blog will help you as a marketing leader identify how to most effectively optimize your marketing costs.
Effectively evaluating operational costs
When it comes to evaluating operational costs, it’s crucial to appropriately consider the long-term impacts of such decisions. If there is one thing we’d like you to take away from this blog, it is that it’s imperative to maintain a strategic and holistic viewpoint. Don’t rush into any decisions you may potentially regret later, and make sure to consider all elements when making decisions. This includes evaluating everything from your team to your suppliers, processes, and technologies to determine what is expendable, what is not, and what can be simplified, automated or better utilized to improve organizational efficiency and financial fitness.
The 3 main elements to focus on for success
Manpower represents a large portion of your marketing spending. But that doesn’t mean the answer is to start slashing jobs left and right. First, consider if there are any opportunities to redirect resources. Can you combine any roles or automate manual or low-value work? Perhaps you can standardize the way your team sets objectives, measures performance, and delivers projects to drive greater efficiency and accountability? Sometimes, the answer lies less in cuts and more in bringing the most out of your people by finding ways to apply their talents where they provide the highest value to the business.
The same goes for your business partners. You should constantly review, evaluate, and renegotiate relationships, particularly when priorities and timing are changing and potentially creating new sets of requirements.
Effective marketing is driven by effective processes. The key is to prioritize, streamline, and automate to ensure that you can deliver substantial cost optimization results. This includes:
- Cutting inefficient or redundant manual processes. Are some of your processes outdated or no longer making sense, given the current context? Are you or your team spending too much time generating reports that nobody reads? Could you replace these reports with marketing dashboards that are available 24/7 within your CRM for example? Eliminate processes where appropriate to free up resources that you can apply to other, more crucial marketing activities.
- Simplifying processes to reduce complexity. Where possible, identify where you can eliminate steps that may no longer be required to reduce time and effort and provide a clear cost benefit.
- Driving consistent use of marketing processes. Sporadic use of processes creates inefficiencies. On the other hand, consistent use of processes provides you with a stable and predictable baseline to optimize. Get clear on what your core processes are or establish shared methodologies to drive consistency as well as realize greater cost efficiencies.
- Automating manual processes and leveraging technology. Don’t just stop at honing in on core processes—there are other, additional opportunities to realize cost savings by minimizing manual work through automation. Evaluate every manual activity and seek opportunities for automation. This helps free people up to provide higher-value contributions to the company.
The key to being effective when evaluating and making changes to technology lies in maximizing what you have and identifying new opportunities to increase efficiency. It’s no secret that marketing departments love spending on technology. However, the other side of the coin is that far too many admit to failing to take advantage of the full capabilities that their marketing technology stack has to offer. When it comes to optimizing, focus on the following:
- Get rid of unnecessary marketing technologies. Identify expendable technologies and discontinue any unused solutions to achieve quick budget wins.
- Simplify/standardize your technology stack. Once you’ve made obvious eliminations, it’s time to review what’s left. Determine the dominant platforms to steer around and focus on consolidating and reducing the remaining solutions you work with. More complete usage of a smaller number of solutions drives more efficient use of technology budgets.
- Eliminate underutilization. There is significant value associated with using what is already available to you. The issue with underutilization often lies in unclear ownership and inadequate training or staffing. Take the time to assess the utilization of current tools and invest in training to maximize value.
- Renegotiate technology licensing agreements. Fortunately, the martech landscape is chock-full of vendors fighting for your attention. At the same time, your technology requirements are ever-evolving. If you find that your current provider is too expensive, complex, or inflexible, look for a new solution. Actively review your technology portfolio and renegotiate relationships to focus on alignment with your current core marketing goals.
The pressure of cutting costs is on marketers, but that doesn’t mean that decisions should be made in haste. Don’t be reactive. Make sure your optimization efforts deliver meaningful results both in the short- and long-term. Furthermore, don’t fall into the trap of focusing only on cost elimination. Doing this will only cause you to overlook areas for potential cost optimization. Lastly, don’t ignore the less obvious opportunities available. Operational costs can often be difficult to spot behind more obvious trims to programs, campaigns, or technology budgets.
Remember—a strategic approach with a holistic viewpoint is the key. Follow the recommendations in this blog, and you will set yourself up for success for the remainder of 2020 and beyond.