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Thinking of cutting your marketing budget in 2024?
This decision may be short-sighted and could seriously hurt your business.
Read on to understand why …
Whenever there is any kind of economic uncertainty, companies become more cautious with their money.
Another common reason for marketing budget cuts is last years’ unmet marketing goals.
Marketing managers and CMOs think: “We didn’t generate the desired ROI by spending £££ on marketing last year, meaning it doesn’t work and we should stop doing it.”
You shouldn’t cut this years’ marketing budget to fix the misspent budget of the previous year.
If your marketing initiatives in 2023 didn’t generate the desired ROI, there’s a good chance the problem lies in poor execution.
And instead of running away from the problem [cutting costs], you should face it [improve your execution].
In other words:
When marketing fails, the problem won’t be fixed by ignoring it. Instead, you should find new and smarter ways of reaching new customers and nurture existing leads.
Help me with cost-effective marketing
Balancing Business Growth & Spending Wisely: 4 Steps
If you want to find a good balance between spending wisely and growing your business this year, you need to start with a clear mind and follow the 4 steps below…
- Review your growth targets (what are you trying to achieve?)
- Review your marketing strategy (how are you planning to achieve it?)
- Review your marketing budget (your marketing budget has to be set by your marketing strategy, not the other way around)
- Stick to your budget (that is if you want to reach your growth targets, of course)
Firstly, a review of your growth targets is crucial. This involves clearly outlining specific goals, understanding key performance indicators (KPIs), and ensuring alignment with the overarching vision of the business.
Second, it is necessary to evaluate your current marketing strategy. This includes actively looking at your past performance, refining target audience definitions, and exploring emerging trends to optimise the approach.
Moving on to the third step, the marketing budget should be according to the established strategy and growth objectives. This means realistic allocations, considerations for long-term investments, and flexibility for testing new initiatives.
Lastly, a commitment to sticking to the budget is crucial for financial viability. This involves prioritising essential activities, regularly tracking expenses against budgeted amounts, and evaluating the return on investment for each marketing process.
(Image source: Unsplash)
The point is, you cannot plan an effective marketing strategy without a budget.
For some, this may mean starting from a clean slate and rethinking everything you’ve done before. For others, it means stopping all activities on things that don’t work and reallocating more budget to things that do work.
How to Improve Your Marketing ROI in 2024?
Below are 5 ways Digivate can help you to maximise your profits and increase your marketing ROI …
#1 Target Only People Who Are Likely to Buy
Instead of reducing your marketing budget, you need to narrow your focus and only market to the types of customers that convert or stay with you over the long term.
To build a buyer persona, start by collecting demographic and psychographic information about your target audience, including their age, preferences, behaviours, and challenges. Use this data to create a detailed and fictional representation of your ideal customer, enabling a deeper understanding of their needs and facilitating more personalised and effective marketing strategies.
We have developed a system that can achieve just that.
Our unique process for building buyer personas is proven to increase your marketing ROI through clever persona iterations and optimisation.
Our persona building process will inform the channels and messaging and any other parameters needed to personalise your marketing at scale.
Unlike other agency target market research, our personas are incredibly scalable – by continually analysing the behaviours and patterns amongst your target audience, we gather more data and learn more about your audience than any other agency.
We are one of the few agencies that are able to utilise the data already at your disposal to uncover the exact demographics that drive business growth.
#2 Reduce Customer Acquisition Costs
Reducing customer acquisition costs involves optimising your marketing strategies and operational efficiency. You can:
- Target high-return marketing channels by analysing data to identify the most effective platforms for reaching your audience.
- Streamline your sales and marketing processes by leveraging automation where possible
- Focus on customer retention through exceptional service and loyalty programs, as retaining existing customers is often more cost-effective than acquiring new ones.
- Analyse and refine your strategies to ensure efficient resource allocation
It’s easy to overspend on marketing if you don’t know how much it costs to acquire a new customer.
We can help you to figure this out as well as determining your customer lifetime value to your business.
Once we know what is the optimal cost for acquiring a new customer, we’ll make sure you’ll never overspend.
#3 Set up Proper Conversion Tracking
Our advice: Implement robust analytics tools such as Google Analytics or other platform-specific tools to track and measure user interactions on your website. But first, clearly identify the specific actions on your website or platform that qualify as conversions.
We can help you make data a top priority.
Without putting emphasis on the accuracy of your data, you could be wasting more money than you realise.
#4 Accurately Attribute Results to Various Marketing Activities
In order to justify marketing costs to your budget holders, you need to set up marketing attribution models. This could include first-click, last-click, or weighted attribution models depending on your business model and goals.
We can help you with understanding your customer buying stages and create systems that turn initial customer interest into a lead and a lead into a sale.
Read more about how we set up attribution models.
#5 Repurpose Existing Content
Instead of creating new content, you probably already have content that your audience engages with – or your competitors do. You can learn from the content out there by using it to inspire your own or you can use the research that already exists to your advantage.
People often take written content and turn it into visually appealing infographics. By using key points, statistics, quotes or images this information becomes easier to digest and it cuts down on the amount of time your team needs to create amazing content.
We can help you to repurpose existing content for new formats, which allow you to reach new customers [who are essentially similar to your current audience, but who have different media consumption preferences].
For example, you can use a series of blog posts to create an ebook.
Or, you could take a data-driven post and create an infographic or a video.
Repurposing content can help you save money and utilise content that has proven to work already.
Why Marketing Should Never Be the First Expense You Cut
Marketing is the most important aspect of running a successful business.
Because without customers, you don’t have a business.
When cutting marketing spend means scaling down activities to the point where they no longer drive results, you have to ask yourself whether you can afford to do it.
Instead of cutting your budgets, we recommend making some changes to how and where your marketing budget is currently being spent. You need to identify what is, and isn’t working and then do more of what is working.
Let us help you with effective marketing. Contact us here.
Article by
Nicholas Turner
