No one saw this coming. How could we? A global pandemic that has quickly put the U.S. – and possibly the world – into recession!
Still, there’s hope: how your business can survive the current economy
One of the most important ways you can help ensure your business survives this crisis is to continue marketing. We know that it’s probably one of the first expenses you think of cutting at this time, but hear us out:
Historically, businesses that continue to market during economic downturns tend to have a big impact on their growth once the economy improves.
How much to spend on marketing now
Naturally, you may want to cut back on some costs of marketing, but you should continue overall. Wondering how much to cut? According to the Small Business Administration, if you have between $1 and $15 million in sales a year, you should spend 7-8 percent of your gross revenue in marketing/advertising.
This translates to: for every $100K you have in gross revenue, you should spend a minimum of $7K on marketing/advertising.
Some advertising to curtail?
Obviously, if you run a restaurant – which at this writing are allowed in many states to offer takeout only – you’d want to stop broadcasting sit-down dinner specials and discontinue advertising your large banquet rooms in bridal magazines (for example).
Proving marketing’s value to a skeptical boss
Let’s say you’re the marketing director of a company and your boss – possibly the CEO or the owner, depending on the business’ size – has said she wants to a) either cut waaaaay back on the marketing budget to save money or b) she mentions – gulp – that she’s thinking of “closing” the marketing department for a bit.
It’s now your job to prove to your boss how important marketing is. So, in addition to showing her the link above from the SBA (about how those enterprises that continue to market come out ahead once a downturn is over), you’ve some work to do.
An easy way to show the ROI of your digital marketing
You’ll want to check the data that shows marketing’s effectiveness. And there’s actually a pretty simple formula you can use to prove it:
(Sales Growth – Marketing Investment) / Marketing Investment = ROI
Let’s say over the past year your company saw a $500K increase in sales. You spent $100K in marketing costs. $500K-$100K equals $400K. $400K divided by $100K equals 4. You received a 400 percent return on your marketing investment.
Your boss probably also will want to see where that growth came from, so it’s wise to fire up your website’s Google Analytics and compare the following for two different time frames: the time before you started your current marketing efforts and now. Some things to compare could include:
- Number of site visitors.
- Which of your marketing tactics is driving the most traffic to your site? If you do need to cut back on your marketing budget, doing this could show you what you could remove in order to save money.
- What sites are sending you referral traffic?
- Where do those visitors who convert on your website come from and then where the go.
- Which of your blog content is getting the most visits and how long are visitors staying on the page (reading the post, we assume)? (You may want to write more often on the more popular topics).
Continuous marketing can be a true lifeline today – and for tomorrow
Ensuring that your company maintains its marketing efforts during this economic emergency truly can mean that your business survives this crisis – and then thrives ever faster once the crisis has passed. How can we help you get through this downturn?
Let Ingenex Digital Marketing – and our own expertise in using marketing automation tools – help you in your digital marketing efforts. If you prefer the “old fashioned” way of contacting us, please feel free to send us an e-mail message, or schedule a meeting with us! We look forward to hearing from you!