Marketers are often asked for mid-year financial give-backs or budget cuts. There are many reasons for this:
- A firm experiences lower-than-expected sales or revenue and must cut costs to balance budgets.
- An unexpected expense comes up, such as an urgent need for a new system or software, and departments throughout the firm have to pitch in to pay for it.
- A company is looking for ways to improve efficiency. One way to do this is to request budget reductions. The thinking is that managers will volunteer to eliminate their least efficient programs.
For most marketers, it can seem almost impossible to cut one or more programs. They’ve worked hard to conceive of, advocate for, plan and execute them.
Here are some steps you can take to manage challenging budget situations.
Focus on metrics, not emotions. While it’s natural to become emotional when asked to cut marketing programs, turn off the feelings and focus on the numbers instead. It’s the best way to avoid having emotions push you into making bad decisions.
Analyze your dashboards and spreadsheets. Do a cost-benefit analysis to identify your least efficient programs. Figure out which initiatives and campaigns are not paying off on your investment. All marketers have things they do that aren’t as effective as others. They should be the first budget lines to cut.
Brainstorm. Bring your team together for a brainstorming session. Ask them to come up with ways to do their jobs more efficiently. Open-up the discussion and encourage them to think outside of the box. If you haven’t done this lately, you may be surprised to find out that you don’t need to cut any programs. You may simply need to do what you do better. Leveraging new technology or methods or improving your project management processes could help cut costs.
Cut programs before people. At most companies, when it comes to budgets, it’s easier to get funds for programs compared to new employees. Naturally, they view hiring employees as a much longer-term commitment.
When it comes time to make cuts, whenever possible, eliminate initiatives before positions. Once you lose a head count, it’s almost impossible to replace it. It’s easier to make a case to re-fund a program during year-end budget negotiations.
Maintain a positive attitude. The person who asks you to cut your budget is not enjoying it any more than you are. It’s important to stay positive, be a team player and support them through the process, not add to their burden. Maintaining a good attitude will pay off over the long term, especially when it comes time to restore funds and programs.
Be transparent. Your team most likely knows that budget cuts are happening. Word gets around quickly at most firms. You’d think most employees would become more productive while cuts are taking place. However, the opposite is usually true. People tend to panic and become less productive during periods of change. Talking to your team about your priorities and how you’re addressing the issue will help them feel more comfortable and confident. This is the best way to keep them engaged while cuts are taking place.
Report regularly. One of the best ways to avoid becoming the target of budget cuts is to report results to company leaders regularly. If they know you run a lean-and-mean marketing machine, they’re more likely to turn to other departments for cost reductions.
Outsourcing is another option many firms turn to when budgets are being cut. It can be an effective way to get projects done with limited funding or staffing. Carpenter Group often pitches in to support our partners during periods of change. Give us a call to discuss how we could help you.