7 Reasons to Keep Your Digital Marketing Costs and Budget Steady During a Sales Slump

Business team weighing marketing costs and customer engagement during a sales slump

From economic fluctuations and political instability to rising competition and seasonal changes, buyer confidence and behavior have many reasons to suffer. When facing a sales slump, many businesses react by cutting marketing costs.

In reality, doing this has only a slight positive impact on the company’s well-being at the moment of the slump. However, it could have serious consequences in the future.

Let’s discuss the top reasons why keeping your digital marketing budget intact during a downturn is a smart decision.

1. Attract New Customers

A decision to alter the marketing budget plan usually affects tactics aimed at new customers. Companies invest in retention strategies and reduce the budget reserved for driving the customer down the sales funnel.

Keeping the 80/20 Pareto principle in mind, the stream (no matter how small) of fresh buying power is what drives many retailers forward during downturns. By limiting your marketing spend to retention, you are losing the opportunity to attract new revenue opportunities. This can contribute to the sales slump and make it harder for your business to stay competitive.

To evaluate how cutting lead generation expenses can affect your business, analyze the marketing and sales metrics from the past year. How much money have you earned from a new audience vs your existing customers?

An educated approach to redistributing your marketing budget according to changing buying behavior can yield better results than cutting marketing costs.

2. Keep Your Market Share

Reducing your digital marketing budget affects your retention efforts as much as it undermines your lead generation tactics. If you choose to shrink your brand awareness and customer loyalty strategies, you may experience higher customer churn.

Since not all of your competition is likely to change their marketing budget plan, you could start losing market share.

The looming economic recession can cause many previously loyal customers to review their buying behavior. If your competition’s marketing campaign manages to catch them at the crossroads, your loyal audience is likely to switch sides.

Even if you see the digital marketing spend by industry going down, it doesn’t mean all of your competition is cutting marketing costs. As the COVID-19 pandemic demonstrated, companies that boosted their marketing efforts instead of cutting costs got an incredible opportunity to obtain market share.

At Future Holidays, we can help you keep your market share by streamlining loyal customer portals, enhancing the on-site experience, and fortifying your retention campaign through email marketing.

3. Increase Marketing ROI

Marketers seeing positive results from maintaining stable marketing costs and campaigns

During a sales slump when customers begin to spend less, it may seem logical to cut marketing costs to maintain the same ROI. In reality, you can achieve the opposite effect.

Studies show that marketers who reduce their ad spend during a recession risk losing 15% of their revenue. The same study demonstrated that around 50% of the brands that increased marketing investments during the previous recession experienced ROI growth in back-to-back years.

When considering marketing spend during the recession, thinking short-term could hurt your ROI. By investing in long-term customer attraction, retention, and loyalty strategies, you are likely to enjoy higher returns in the future. It’s best to focus on cost-effective strategies that yield impressive results in the long run.

4. Gather Resources for Bouncing Back

No matter how severe the sales slump is, it’s going to end. The economy will bounce back, or the customers will readjust their spending habits. In any case, when you are finally ready to increase marketing costs, you could find that you need to rehaul your entire marketing strategy.

Adjusting your marketing tactics to the new budget will take time, especially when you have to allow for new technologies and strategies. During this period, you could lose an opportunity to capitalize on the pent-up buyer demand.

By keeping your marketing budget intact, you don’t just hold on to your market share. You gain access to new customer segments after the sales slump ends. You also give customers a solid reason to stay with the brand.

5. Maintain Brand Stability and Presence

While your customers may not be willing to spend as much money on your products and services during a slump, they continue browsing websites and using social media. If, by cutting marketing costs, you suddenly disappear from their radars, your audience is likely to pay attention to other brands.

Maintaining a healthy online presence is key to supporting your brand awareness tactics. Since customer attention spans are short, they could forget about your brand by the time the slump ends.

Even the most loyal customers could become suspicious when your branding efforts begin to wane. As soon as they feel abandoned, buyers start shopping around for other options.

6. Keep Meeting Your Business Goals

Marketing goals have a strong alignment with business goals. Cutting the budget may hinder your business growth and development plans. While it may seem as if growing and developing a business during unstable economic or political times may be out of the question, many companies manage to make significant breakthroughs.

When your competition is losing profits and customers need encouragement to boost their confidence, your marketing efforts matter significantly. The right approach to promoting your products could help increase sales and meet your revenue goals.

At Future Holidays, we offer you multiple opportunities to promote your products even when the buying power is at its lowest. We leverage the latest conversion rate optimization (CRO) tactics and enhance website design to streamline the customer experience and achieve a high marketing ROI. Our team leverages creativity and experience to fit flexible marketing tactics into your current budget.

7. Support Your Revenue

When evaluating digital marketing spend by industry, remember that your competition’s tactics shouldn’t define your actions. In the short term, hard cost savings that stem from cutting the marketing budget are easy to see. However, in the long term, lower marketing costs don’t save money.

Over time, the reduction in marketing spend leads to a reduction in the bottom line. After all, marketing doesn’t just spend money. It makes money. The more you try to save on marketing, the more you can hurt your revenue.

Keep Your Business Afloat Without Cutting Marketing Costs

Cutting marketing costs during a sales slump is a low-quality band-aid for your budget. You can see some short-term effects. But you hurt your revenue, reputation, and business goals in the long run.

Companies that succeed in maintaining their marketing budgets through the slump can steal market share, increase their revenue, build strong customer relationships, and much more.

Creating a marketing plan with the recession in mind can be complicated. At Future Holidays, we can help you grow your brand by: