6 ways to optimize marketing ROI during economic uncertainty
Depending on whom one asks, anywhere from 30 to 35 percent of North American firms plan to increase marketing budgets for 2025 – apparently the lowest number to do so of any region in the world.
Why the Pullback?
Several factors are contributing to this cautious approach to marketing spending, three in particular:
- Economic Uncertainty: Concerns about inflation, recession, and geopolitical tensions
- Shifting Consumer Behavior: Facing rising costs, they are becoming more selective in their spending habits
- Measuring ROI: CMOs are under greater pressure to scrutinize marketing investments and quantify results of each campaign
Laser-focus on the Low-Hanging Fruit
While it may be tempting to cut back on marketing expenses during tough times, doing so can have long-term consequences. Rather, strategic investments and deployment of marketing resources (time and funds) can help businesses identify and capture the most profitable market segments.
How? Better targeting. The cost of accurate targeting (market segmentation) is small by any reasonable measure. It provides immediate benefit by eliminating effort delivered to prospects that “can’t” or “won’t,” or who will take a great deal of effort to generate interest.
Here are 6 methods to maximize thin marketing budgets with strategic targeting.
1…Stick with what works. Prioritize (and find similar) channels that have historically delivered the best results and align with your target audience’s preferences.
2…. Monitor and measure. Develop a KPI score card and track essential metrics organized to reveal who is buying, who isn’t and their reasons, website traffic, conversion rates, customer acquisition cost, repeat purchase, customer and employee satisfaction, customer lifetime value, etc. Decide where marketing efforts are thriving, and whether those efforts could be improved, discarded, or redeployed to produce greater, more sustainable sales.
3… Optimize Marketing Campaigns. Employ enhancements like personalized messaging, using social media and CRM tools to automate repetitive tasks, regularly scheduled reviews of campaign performance followed by necessary adjustments.
4 … Conduct periodic market research. Use objective data from primary or secondary research to stay ahead of, rather than chasing, emerging market trends. This is essential for making informed decisions about targets, marketing strategy and tactics, and to allocate resources effectively.
5 … Build strong internal relationships –EMPLOYEES. Step outside your office and collaborate with sales, customer service, fulfillment, human resources and other teams to ensure goal alignment and maximize the impact of marketing efforts.
And last but not least…
6…. Build Strong Relationships with, influencers, channel partners, and customers to amplify your reach and generate third party endorsements. This is a strategic approach that is rarely used to full advantage, despite being the most cost-effective.
Defying the Trend: Success Stories
Despite the prevailing trend of marketing budget cuts, several companies have demonstrated that strategic marketing investments can yield significant results, even in challenging economic climates. One of those companies is Dorsey & Company.
Using these general approaches we’ve guided clients to:
- Overcome competitors that undersold their product by 30%, without lowering our client’s prices or increasing marketing budgets
- Successfully launch a nationwide retail brand through market segmentation revealing store locations closer to potential customers, with fewer competitors, at a lower cost per square foot
- Achieve annual home equity loan production goals in just 90 days, using just 25% of the annual budget
- Increased non-sales employee participation in a sales incentive program, resulting in a 450% increase in sales production in just 4 months, without increasing the incentives paid on performance necessary to earn it.
No shame in taking the path of least resistance
By carefully allocating marketing budgets and focusing on high-impact strategies, marketing leadership can navigate challenging times and emerge stronger than ever.