5 Reasons You Should Cut Your Marketing Budget

Megan Effertz, President at Agency 128


I’ve spent my entire corporate career fighting for marketing budgets. Now, as the president of a strategic marketing agency, I think some companies should cut their marketing budgets. Seems counter-intuitive that an agency would suggest that companies cut their marketing budgets, right?

Wrong. When I was on the corporate side I spent months strategizing and partnering with sales and business unit leaders to determine goals and budgets, then develop strategic plans and marketing strategies to meet those goals. After setting those plans in motion, I’d monitor and adjust along the way to make sure we hit our goals. I thought this was common practice. What I’ve learned on the agency side is not every company spends the time or money needed to determine what their goals are, let alone to create a plan and budget to get them there.

So yes, I do think some companies should cut their marketing budgets because it is a waste of resources. I’d recommend companies cut their budget if any of the following 5 reasons apply.

You can’t articulate clearly what you are trying to accomplish

Often times instead of getting prescriptive about a goal, businesses will aim to simply grow revenue. To accomplish this, they execute marketing activities with a spray and pray mentality. Although their marketing team will be busy, the efforts will not get a lot of results.

These businesses feel good about marketing because they are doing so much activity. My mantra has always been results not activity. Often times, greater results could be achieved by eliminating a good portion of the activity and being more focused in their efforts. Audiences are bombarded with messages. You need to find them when and where they are looking for information and lead them to you. That takes time, repetition, consistency and planning with a clear end goal in mind.

Revenue growth is not a clear enough goal. What revenue do you want to grow, with whom and in what timeframe? Setting these parameters will help determine what needs to be done, by when, and how much investment is needed to make it happen.

You are reacting instead of executing a plan

Too many times, a company’s strategy is to grow revenue. Growing revenue is not a strategy, it is a goal. How you are going to grow revenue is the strategy.

Only communicating a goal to your sales & marketing teams is like saying, “We’re going to Paris!” and not telling anyone how you are going to get there. Your employees will make interpretations, causing conflict and unnecessary resource consumption.

You need a strategy to keep everyone focused and moving towards the same goal. This helps your team understand how you are going to achieve the goal, as well as their roles and responsibilities along the way. It also helps determine a budget to support the strategy, allowing you to decide if the ROI is worth it. Having a clearly defined strategy to meet a clearly defined goal shifts culture from activity-focused to results-focused.

You don’t have buy-in from Sales

This is probably one of the most critical components: Get buy-in from sales for your marketing strategies. If your marketing strategies aren’t aligned either with the way the customer buys or the way sales sells, it will die a slow and painful death. Make sure to take the time to work with sales. Solicit their ideas, make them part of the process, share concepts in the preliminary stages of development. They know the market and how the customer will respond or how the lead will flow through the sales cycle. They will let you know what will work and what won’t. You don’t have to take all of their ideas, but use the information to make stronger marketing strategies. Plus, they are more likely to follow up on marketing’s leads if they are aligned with the strategy.

You’ve only funded part of the plan

If you have a solid plan and have aligned with sales but only get part of the plan funded, you need to re-evaluate. You have to reset expectations to what can be accomplished with a smaller budget. Sometimes the plan still might work if you cut corners, but often times it just becomes marketing activities that don’t drive results. Cutting out key pieces to move a buyer through the sales process to save a few dollars up front undermines the strategy and diminishes the return. If you’re going to hack a plan to save some dollars just cut the whole plan so you don’t waste dollars that won’t give you the results you wanted.

You want your competition to win

The last reason I’d ever recommend a company cut their marketing budget is if they wanted to help the competition get ahead of them. We all know that marketing budgets are the first thing to get cut when companies aren’t hitting their goals. Marketing is viewed as an expense, not a profit center like Sales. However, when you need more sales, cutting marketing is the last thing you should do. In fact, when markets are down and the competition is cutting marketing too, I say reinforce your commitment to marketing. It’s times like these that there will be less noise in the marketplace and your message can be louder and more impactful. Cutting your marketing budget only makes it easier for the competition to steal market share from you, which is hard ground to make up.

Megan Effertz is an entrepreneur, business and marketing consultant and President of Agency 128, a 40+ year old strategic marketing firm. Megan has held executive, sales, and marketing roles in a variety of industries including health care, manufacturing, marketing technology & services and real estate.