Spending Money to Make Money: Why Cutting your Marketing Budget Won't Make You More Profitable
Here at Fearless Foundry, we’ve helped dozens of companies get in front of new audiences. Our clients, like all business owners and leaders, spend a lot of time balancing new revenue and managing growing business expenses, and doing their best to validate that the costs they are incurring are justifiable in the way they drive results and benefit the growth of their business.
In fact, as a scaling business ourselves, we understand that challenge firsthand.
However, it is an orange flag for us when we see clients cut their marketing budget in the hopes of saving money. Marketing may seem like a “nice to have” instead of a “need to have,” but we’ve worked with enough companies to know the ROI of well-executed campaigns firsthand and can tell you that cutting your marketing budget is usually not the best decision for your business when it comes to building or maintaining your bottom line.
Why is Marketing Important?
The ultimate goal of any marketing strategy is to welcome people to your business’s doorstep. After all, if you don’t have a steady flow of new leads coming your way, you don’t have a business that will be growing much in the months ahead. While cutting back on marketing spend might save you money in the short term, you have to ask yourself: will those savings be worth it if you lose customers or clients and don’t have new leads to replace them?
Here are some of the top ways effective marketing can benefit your company:
Reach new audiences: Smart marketing helps you connect with new potential customers or clients who wouldn’t otherwise know about your business.
Build a fanbase: Nurturing your community of existing customers leads to more loyalty and long-term business relationships.
Connect with dream customers: Targeted marketing allows you to reach the specific clients or customers you want to work with, also known as your ideal client persona. You might just be working with okay customers or clients but marketing can help you identify and finally attract the people you really want to be doing business with.
Gain industry insights: The data that you can capture through consistent marketing can lead to analysis that will reveal valuable trends about how you’re attracting new customers, so you can spend every future marketing dollar effectively.
Boost online visibility: Strong marketing strategies improve your search engine ranking, making it easier for customers to find you — blogs, social posts, and new website content all are key to gaining and maintaining a strong search presence.
Earn trust and loyalty: Consistent, quality marketing builds credibility, trust, and loyalty among your audience.
Understand your target audience better: Marketing allows you to learn more about your audience's needs and preferences, enabling you to serve them better.
Enhance your reputation: A strong marketing strategy helps build a positive reputation in your industry.
Increase sales and reduce sales cycles: By targeting those most likely to buy, marketing can increase sales and shorten the time needed to close deals.
Some platforms try to make it easy for business owners to manage these elements on their own, but without an experienced team, it typically takes twice as long to develop a strategy solo… and yields half the results.
The Power of Digital Marketing
Most businesses don’t advertise on billboards anymore. Heck, many businesses don’t have a physical office space anymore! Marketing has evolved as well, with traditional methods like in-person events and print media being replaced by search engine optimization (SEO), content marketing, social media, video marketing, email marketing, lead generation, and more.
Having a dedicated budget for digital marketing is non-negotiable. Here’s why:
93% of consumers use the internet to find information about local businesses, which means a digital marketing strategy is essential to being easily found online.
SEO is still highly effective with organic search being responsible for 53% of website traffic. Websites ranking on the first page of Google capture 91.5% of search traffic, making SEO a critical strategy for driving engagement.
Video marketing is still booming, with 93% of brands reporting they gained a new customer due to a video posted on their social media channels.
90% of marketers report an increase in exposure via social media platforms and 75% report increased website traffic through social media efforts.
Email marketing consistently delivers the highest return on investment for small businesses. With an average ROI of $42 for every dollar spent, 42% of companies consider email marketing one of their most crucial lead generation channels.
Making Room for a Marketing Budget
Instead of cutting marketing spend, consider looking for inefficiencies elsewhere. Are there subscriptions or services your business no longer needs? Could certain vendors be streamlined or eliminated? Are company events or retreats more lavish than necessary?
Consulting with a financial advisor or business coach (like the amazing Mathew Heggem on our Fearless Team) can help identify areas to cut costs without sacrificing your marketing budget. Remember, investing in marketing isn’t just about paying for social media posts or email campaigns. It’s about investing in expertise, creativity, and the time and effort required to grow your brand effectively.
The Value of a CMO
With the complexity and scope of today’s marketing landscape, having a Chief Marketing Officer (CMO) can provide invaluable support to your in-house team. A CMO brings strategic oversight to your marketing efforts, ensuring that your strategies are aligned with your company’s quarterly goals. However, most small businesses don’t need a full-time CMO, which is why a creative consultancy like Fearless Foundry is such a good fit for emerging companies. We provide fractional CMO services alongside our campaign-based and brand strategy work, so you can get the expertise and quality of a CMO for a fraction of the cost.
Implementing the Right Marketing Strategies
If we’ve convinced you to keep or even grow your marketing budget, you’ll next have to decide how to allocate those funds. Should you handle marketing in-house, or should you outsource to a team of professionals?
If you choose to manage it yourself, focus on these key pillars:
Social Media Marketing: Using industry best practices, engage with your audience on platforms like Instagram, Facebook, Twitter, LinkedIn, YouTube, and TikTok. Be sure to stay on top of specific algorithmic changes, which can occur on a daily basis for each platform, and adjust your content accordingly.
Email Marketing: Develop compelling newsletters and email campaigns that showcase your offerings and keep your audience engaged. Track open and click-through rates, keeping these numbers up while reducing unsubscribe rates.
SEO: Use the right keywords and optimize your website to improve your search engine rankings. Track and adjust based on how your search terms perform.
Content Creation: Develop blogs, e-books, white papers, and other content that captures attention and showcases your expertise.
Even these four pillars are a lot to manage, especially if marketing isn’t your sole focus. That’s why we typically recommend partnering with a professional creative consultancy like Fearless Foundry. With experts handling your marketing strategy, you can focus on what you do best while knowing your brand is in good hands.
To learn more, schedule a Discovery Call with us! Let us show you how easy it can be to bring in new audiences, retain your current ones, and gain credibility through marketing.
