Experts: Dont Slash Marketing Budgets

Experts: Dont Slash Marketing Budgets

As tempting as it may be, abandoning marketing efforts to save money during an economic downturn may prove unwise.

So say marketing experts who fear the current economic downturn may prompt solution providers to slash their promotions budgets. But while solution providers should promote themselves to generate more business, they also should stay alert to which programs produce results and be disciplined enough to drop those that don't work.

While making cuts may be unavoidable for some, experts nevertheless encourage solution providers to take the long-term view when it comes to branding and promotion: Cutting back too much now will hamper efforts later to promote the business.

"Marketing must continue throughout potential downturns so that your sales pipelines don't dry up," says Bob Vogel, chief marketing officer at Autotask, a vendor of professional services automation software used by solution providers to run their businesses.

"Don't forget it costs more money to acquire customers than [to] keep the ones you have," Vogel says, "so focus on keeping the customers you have happy and on upselling additional products and services that will increase the value they receive from your products."

Arthur Germain, principal at marketing agency Communication Strategy Group, says, if anything, now is the time to focus on marketing. "No amount of cutting costs is going to add revenue," Germain cautions.

Dave Greves, co-founder of Denver-based Faction Media, which focuses on technology-based business-to-business marketing, says cutting back on marketing is counterproductive in an economic downturn.

"At some level you have to have top-line revenue growth, and that's going to come through your sales and marketing channel," Greves says.

Greves, however, cautions that it's important to track results and stay focused on the things that work. Promotional programs that fail to produce any results should be abandoned, he says.

But if a program works as well as a recent e-mail marketing campaign by MasterIT, an MSP (managed service provider) in Bartlett, Tenn., it pays to continue funding the initiative. MasterIT sent an e-mail to 1,842 business leaders with the subject line "2009 Budgeting" to pitch managed services. In the text of the e-mail, the MSP made the case that its managed services offering can save clients 20 percent in IT expenses.

MasterIT CEO J. Michael Drake says the message resonated with the targeted recipients. About 33 percent of recipients opened the e-mail to read it. That "open" rate is comfortably above the 26 percent average for mass e-mails.

The message, says Drake, though simple and straightforward, hit home with clients looking to tighten IT budgets. As a result of the e-mail campaign and other marketing efforts, including events and phone calling, Drake says MasterIT increased its managed services revenue by $18,000 in October 2008.

"We're very bullish about our pipeline now," Drake says.