Estimated reading time: 8 minutes

How are marketers doing more with smaller budgets?

Short answer is: They aren’t. And, if they are, sacrifices have usually been made.

According to Gartner’s The State of Marketing Budgets and Strategy 2022, marketing budgets have seen an increase of 6.4% (2021) of company revenue 9.5% (2021). However, budgets are still not as high as they were before the pandemic began.

Although budgets have kind of improved, businesses are still battling many challenges. To begin with, they must adapt marketing strategies in order to fit the new customer behaviors that have resulted from pandemic conditions. How do consumers want to interact brands now? What is driving their buying decisions? At what point will conversions happen?

Marketers are also experiencing a lot of anxiety and new challenges due to increasing global instability. How is that affecting consumer behavior? How is that affecting spending habits? What does this mean for business?

With increased periods of instability and uncertainty, marketers are under greater pressure to prove the efficacy of their budgets.

Related: Top 5 Skills to Look for in a Marketing Agency [with stats and infographic]

What do you do when budgets are decreasing, but expectations are rising?

One of the biggest business challenges for marketers is to achieve the max out of each customer interaction while also providing enthralling experiences that encourage loyalty and engagement.

The need for growth is critical for businesses as they continue their recovery from the pandemic. Businesses need to maintain returning consumers, and acquire new customers, to keep the business going during these tough economic times. As we move closer to what appears to be another recession, that necessity grows.

Unfortunately, in the same period of time when business uncertainty rises, marketing budgets generally shrink. For marketers, this prompts the age-old question: how can companies expect to expand, or stay afloat, if they are not allocating budgets for marketing?

Marketing leaders, on the other hand, are left rushing to modify strategies and budgets in order to accommodate for reduced marketing spend. Keeping in mind that revenue and market share expectations did not change. Simply stated – marketers are being asked to accomplish bringing in more revenue with less budget to work with.

Related: How Much Does SEO Cost For Small Businesses?

Why have the budgets for marketing been cut so deeply?

Marketing’s business function is often underestimated. Stakeholders often fixate on profit – sales and growth – instead of recognizing marketing’s importance and how it works alongside sales.

It’s not simple to create effective marketing that results in only high-quality leads and repeat customers that will spend more money. Unfortunately, not everyone feels the same way. Many imagine marketing as the sending of pretty emails, posting to social media, and engaging online with customers or leads. Most stakeholders don’t understand how important each marketing decision is, or how much effort goes into making marketing an effective sales tool. Every word, every image, every everything matters.

The pandemic forced businesses to cut back their budgets, but you persevered. Now your fatal flaw is that you have been forced to do more with less, and it’s been noticed.

“Use it or lose it” – an expression every seasoned marketer knows all too well

In marketing, it’s not a bragging right to come in under budget. If you don’t spend your entire marketing budget, it can have big consequences for your company:

1. You don’t meet your goals. When your team fails to meet objectives, it raises concerns about both your credibility and the marketing budget.
2. You do meet your goals. Unfortunately, this causes the people in charge of budgets to think that you don’t need them, and thus they give you less money for next year.

Many budget makers have been led to believe that you don’t need as much budget because you’ve shown you can function with the previously limited marketing expenditures and the effort and dedication of your marketing staff never wavered. If they only knew… and, they should. Proper reporting showing repercussions of hsving a lower budget on lead generation vs. a higher budget will help you win the case for a higher budget, for example. But, in most cases, budgeting is still failing to keep up with marketing and sales demands. Instead, those budgets have been reassigned.  

Related: How to Create Content that Converts

The great Digital Transformation and the best ever argument for Digital Marketing

Your company’s ability to operate online during the pandemic has likely been the key determinant of successes and failures over the previous several years. Offline marketing and in-person event budgets were re-invested into online and digital marketing initiatives.

EY’s research revealed that 44% of corporate firms are making significant progress in their digital transformations.

What is digital transformation, and what does it mean for your company? 

Digital transformation is integrating digital and online technology into every area of your company. If your company has not adopted it yet, it will likely alter the way the company operates when it does. It will also change the way your company provides and proves value to customers. For some, it may mean a pretty large internal shift for businesses that have not quite yet moved into the digital world.

Businesses must constantly be pushing the envelope, trying new technologies and working methods, embracing failure, and pivoting when needed.

Related: Top 8 ways to rank a website without link building

How are companies allocating their marketing budgets?

Digital transformation programs can be a marketer’s dream. If you haven’t already, now is the time to stake your claim in these types of initiatives. According to EY, 4% of businesses claimed they had an “extremely sophisticated” way of leveraging the data they have access to. Only 4%.

Because every good marketer knows how important data is, that statistic is both exciting and terrifying at the same time.

When budgets are reduced (or cut), it’s important to think strategically and align the company’s technology needs. Marketers can optimize their spending by leveraging data from previous and existing digital transformation initiatives.

Marketers need a solid platform to assist with organizing data and structuring it in a way that saves time and delivers results. All-in-one marketing platforms can be critical to marketing and sales teams. Customer service teams and other teams within companies can benefit as well. A few great examples of platforms that help unite data and reporting, as well as customer communication channels, are HubSpot, Salesforce, and even MailChimp, and Twillio.

Investing in a great marketing platform is a great start

When everyone in your business has better access to data, everyone benefits. A great marketing platform will:

• Create smooth and consistent experiences for your customers throughout their buying journeys.
• Allow salespeople to identify and understand customer needs and interests.
• Provide customer service teams with information about a customer’s past communications and interactions
• Assist your digital marketing and web teams with identifying UI and UX improvement opportunities
• Provide customers a way to give feedback for products, services, and interactions, which also provides improvement opportunities 
• Unite your company’s teams with a central point for communication

So, how can marketers do more… with less?

Marketers are feeling a pinch in several areas outside of budgets. In that same study from Gartner, 58% of CMOs stated that they do not have the in-house abilities to effectively design, execute, and deliver marketing strategies and goals. In-house marketing teams can be expensive, and most in-house marketers are… tired. So, so tired. They are being pushed beyond their own levels of experience, urged to learn more in areas they are not knowledgable in, and produce results that are seemingly impossible. With limited staff, limited knowledge in the new digital transformation efforts needed by companies, limited salaries, and limited marketing budgets, in-house marketers are beyond stressed.

More tips on how to do more with less

If you can relate to the problems above, here are a few tips on how to do more with less – more leads, more online sales, and more ROI – with less budget, less staff, and possibly limited knowledge on all things digital marketing:

1. Make sure to align marketing and sales goals directly with the goals of the higher-ups in your company. Being on the same page will help form alliances with those that ultimately provide the marketing budgets. In addition, you can decide together which marketing KPIs are the best for measuring the effectiveness and success of digital marketing methods.  
2. Research and analyze your company’s existing digital marketing data and plan your marketing spend accordingly. Look closely at data that shows the most revenue growth potential and uses technology that delivers pre-determined critical analytics, consumer personalization, and the ability to target high-quality leads.  
3. Data, data, data. Research it, analyze it, and most importantly, capture it. Make sure that data collection is happening at every single touchpoint your customer goes through. This will help with the development of customer-centric automation and direct digital marketing method priorities – saving time and generating revenue.  
4. And, more data. Customer metrics such as RFM (recency, frequency, and monetary value of past purchases) or even better, eRFM (recency, frequency, monetary value of past purchases, and engagements like email opens and/or online activity). These insights are critical for identifying high-value customers, leads, and sales potential. The focus needs to be on customers that are most likely to be conversions. 
5. Customer lifetime value (CLV) also needs to be in sharp focus. CLV data helps identify the monetary value of your Business as Usual (BAU) marketing methods. BAU strategies and action plans are important in maintaining critical workplace functions and processes during an organizational crisis… such as a pandemic or global economy challenge.

I hope this article helped define ways that marketing teams can do more with smaller budgets. It advises aligning marketing and sales goals with those of the company’s higher-ups, researching and analyzing digital marketing data, and capturing customer data at every touchpoint. It also recommends focusing on high-value customers and using customer lifetime value data.

In general, marketing your business can be extremely difficult, if not seemingly impossible in some cases, with smaller budgets. These are just a few methods to help ease the financial squeeze. If you’d like to learn more about how to stretch your marketing budget and still get a high return on investment, contact us. ThinkPod Agency offers marketing consulting for companies to help you analyze your current efforts and get the most out of your budget.