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It’s time for Plan C: Adjusting your marketing budgets in crisis times
The best disaster plan is one you make before disaster strikes, says Acoustic’s Michael Trapani.
The sudden global upheaval caused by the COVID-19 pandemic has pushed industries to the brink, and many companies have had to throw Plan A and even established Plan B strategies right out the window. That’s because, when it comes to managing your marketing organization through a crisis of this scale, it means starting with “Plan C”.
“It is always going to be more effective for you to have options that you can start with that you build before you’re panicked because you’re going to make more rational decisions in the early stages,” said Michael Trapani, senior director product marketing for Acoustic.
According to Trapani, who shared these insights during his presentation entitled “How to Manage a Marketing Budget During a Crisis” at the recent MarTech conference, the key is to create a Plan C before you need it.
For those caught off-guard by the pandemic, now is an important time to make sure you aren’t blindsided again since many organizations are deep in fall planning for the January 1 start of the next fiscal year.
“Now, this doesn’t need to be a solo act, it should be a team activity. And the best ideas are going to come from people who think differently from you,” he said.
“You may not be thinking about all the scenarios, especially from other functional organizations, not just in marketing. But what happens if you lose some of your sales staff. Well, now you need to change your model if your pipeline is going to support that sales staff right. So it’s important for all of us to think about the other opinions and points of view that might help in the creation of this Plan C.”
Breaking down scenarios
While the pandemic may be the most recent example of a crisis, there are multiple reasons that a company may need to make quick reductions in budgets. In the case of how you might manage that for your organization, Trapani said it is important to evaluate your options.
“I would suggest whenever it comes to producing a dramatically different budget than what you had originally planned that backs into your goals cleanly is to not produce one budget but to produce three,” he said.
“Let’s say your ask was a 20% reduction. Scenario one is going to be about 5% to 10% higher than the asked reduction.”
Essentially, that is a scenario you present to a CFO that satisfies the request to cut some budget but also ensures your department can hit current performance goals.
Even if the CFO doesn’t go for it, “it’s important that you have an option that includes your best attempt to hit your existing goals before whatever crisis took place. And in the event that things change from the financial team’s perspective, you already have a shovel-ready plan in case things change,” he said.
Then there’s scenario two, where you make the full budget reduction as requested. In this case, strategic shifts will have to be made in the department.
The third scenario is just for you and should not be shared with your CFO. In this case, create a budget that’s even lower than what was originally requested.
“It is not entirely unlikely that you will need to reduce it one more time,” said Trapani. “Having this scenario will really help you think hard about what you might need to do if the absolute worst case takes place. As a bonus, it’ll make you feel better about only cutting 20%.”
Adjusting your strategies
As Trapani said above, making requested cuts in the marketing budget will likely mean changing your strategies to reflect the lighter purse you’re pulling from. It is never going to be an easy process.
“You can’t try to do Plan A with Plan C money,” he said. “You need to start doing more things for the right amount of money, and that will mean that your target will be lower and the goals that you plan on reaching will be less than what you went in with.”
For starters, prioritize the big numbers first. Those are things like paid media, marketing activities at large events, and investments in martech. But even in those areas, Trapani said, make sure you are being thoughtful about getting the most out of your investments.
“Make sure that you’re bringing your A-game to every single opportunity because that is what’s actually going to be most effective.”
Secondly, let goals drive your decisions.
“Everything from the business objectives you have, whether those are our sales, whether those are conversions, whether those are renewals or increasing the loyalty of your customers … back those goals into your decisions,” he said.
Lastly, let marketing tools help drive you towards those goals. That includes using tools like automation platforms to help you do more with less. Personalization engines are also good for automating content discovery and project management platforms can help teams operate more efficiently.
“There’s a lot of tools out there that can really help you work smarter, especially if you are working with a reduced staff or with a reduced budget.”
Like Trapani said earlier, these are hard decisions, but you should approach them with confidence.
“You got this,” he said. “With the right skills and the right practices, you can take this difficult situation that you’re in, learn from it and get the outcomes for your business, your company, and for your team that you’re looking for.”
“So take a deep breath, breathe in, and get to work.”