Cutting Your Marketing Budget is Dangerous – Here’s Why

I’m a corporate marketing drop out. I understand what gets cut first in hard times – marketing. One of my previous roles was significantly downsized, which led to me working independently on the side for many years before running an agency full-time. That downsize was the birth of Hot Dog Marketing, and guess what year Hot Dog Marketing was born? 2008.

I’m not saying this because I sell marketing services. I say this because I’ve seen this happen to unfortunate business owners all the time. You cut some of your marketing expenses over here because you had a bad month, then you cut a little more over here because the month after that was worse. Before you know it, you’re out of business.

Think long-term, not short-term when it comes to marketing budget planning.

It’s one thing to stop spending money on traditional advertising because you’ve gotten zero from it. It’s quite another to stop investing in your brand, in-person, and online marketing because of temporary cash flow issues. All three of these marketing activities inject long-term value into your business. If your marketing plan is positively contributing to your brand recognition, referrals, better search engine results and new and repeat customers, never cut them.

I’ve been there – had to make tough decisions like, “Guess what guys, we’re not getting the printer fixed this month, and that team building event is postponed.” But we never cut marketing if it’s part of our referral, retention, or online marketing efforts. These are machines that need to keep turning for your business to continue to grow.

Check out our free template library so you can plan your marketing budget with a proven strategy.

One bad month can turn into several bad months if you keep cutting your marketing.

Depending on your sales cycle, reducing your marketing this month may affect your success months down the road if it takes months for buyers to decide to use your products and services. You do not feel the effect right away, which will make it tempting not to reinvest and or to continue to cut your expenses.

Here what the typical DIY Marketing Cycle looks like:

Here’s what the sales feel and look like:

Here’s what it looks like if you make significant investment cuts during a temporary cash flow crisis:

How do you manage?

1. Get help from a chief financial officer. You need a cash flow plan and you need to understand the trends of your sales cycle each year.
2. Always have something set aside each month for marketing. Figure out what parts of your program are not open to compromise.
3. Get smart about your brand. If you know what your business stands for, why it’s unique, you can then get creative with your limited marketing budget. If you’re clueless about your brand, then finding solutions can be challenging.

Try to remind yourself, even in tough times, that you need to do what helps your business not just now, but in the future. Check out our bookmarkable page of helpful marketing planning templates so you can plan for success.