Two words that marketers hate to hear in the same sentence:
For reasons that we’ll get into shortly…
Marketing teams have historically been the first to feel the squeeze during times of economic hardship.
If you’ve been in the game long enough to remember the financial crisis of 2008, this will be no surprise.
Heck, if you remember the height of the COVID-19 pandemic you’ll know a thing or two about marketing cutbacks.
Companies began to feel the pinch during that unprecedented period as many weren’t sure how to react.
Should we keep marketing? Should we keep selling? Should we just try to stay afloat?
Barely two years later, we find ourselves in yet more global financial uncertainty.
So, it begs the question…
Why are Marketing Cutbacks Happening?
Central banks worldwide are ramping up interest rates to curb inflation, leading many to believe that there’s an incoming recession.
According to the latest International Business Barometer report from Sapio Research, 95% of the world’s businesses are concerned about a looming recession.
Marketing is often viewed as a non-essential cost. So, when times get tough and finances come under scrutiny, a business will typically look at its costs from the previous year.
Doing so gives them a better understanding of exactly what was spent and where and allows them to determine whether it was money well spent. Ultimately, this will lead them to decide whether to increase or decrease their budgets for the future 📊
This typically happens during times of financial uncertainty as businesses have bigger concerns like paying salaries on time and other essential costs.
If it comes to deciding whether to pay key staff members or reduce advertising spending, they’re most likely to choose to cut the advertising budget 🤷♂️
One of the biggest learnings from how businesses conducted themselves during the pandemic was that cutting sales, marketing, and communications was the wrong thing to do.
Brands that prospered throughout this difficult time were the ones who were able to leverage their marketing and comms teams to build communities and continue to communicate with their audiences. While those that jumped the gun and axed large amounts of their workforce suffered in the long run and were tasked with recruiting the jobs they’d made obsolete shortly after.
However, it seems that businesses have been reluctant to learn from recent history and look set to do similar things once again 👇
“While many companies say that their top mitigation strategy will be ramping up sales and marketing activities, most are still likely to bite the hand that feeds them… The highest proportion of potential redundancies are set to be made in crucial areas such as sales and communications.” Jane Hales, Managing Partner at Sapio Research.
Why Cutting Marketing Budget is the Wrong Thing to Do
Who will know your business exists if no one ensures you’re getting it seen?
Investing in marketing has increasingly become one of the best decisions a business/business owner can make. Whether you’re a start-up with 10 employees or an Apple-sized monster with a marketing department of thousands, investing in marketing and communications is more essential than ever before because people value brand, trust, transparency, and purpose above all else 💪
It’s all well and good focusing on things like brand mission and purpose, but if no one is communicating this with your buyers and future employees, then your efforts will go unrecognized or underperform at best.
Companies that cut their marketing and communications budgets will not only struggle to retain customers (without proper community/brand management), but they’ll also struggle to attract new buyers once economic growth returns.
You know the old saying:
“Short-term gains create long-term pains.”
What’s more is that without a communications team, you leave yourself vulnerable in a public relations crisis, something that 41% of American businesses experienced after the pandemic and is increasingly likely during times of economic hardship and uncertainty.
Think about your competitors too! You’re going to be the first choice when your customers can purchase from you again if you’re the ones they’ve continued to hear from 👏
Your Secret Marketing Weapon in a Recession
Okay, I don’t want to make assumptions…
But let’s say the worst-case scenario has happened, and your budget has been cut back significantly, forcing you to try to do more with less.
One of the biggest mistakes we can make in marketing is to do something just because “that’s what everyone else is doing” 🤦♂️
Going against the grain and being disruptive is how your company will make a name in today’s market.
And yet still, all too many companies continue to invest in traditional advertising methods simply because that’s how they’ve always done things. The thing about traditional advertising methods though is that they’re not cheap 💰
Take LinkedIn ads, for example; the average CPC in 2020 was $5.26. That’s when prices were rock bottom due to a lack of companies trying to advertise during the pandemic.
The secret weapon you already have access to?
It’s right under your nose.
Drum roll! 🥁
A company’s employees are one of the most underutilized, impactful, and cost-effective advertising assets, and yet only a small percentage of companies leverage this.
The strategy/topic of employee advocacy needs no introduction at this point. Its emergence was largely due to the COVID-19 pandemic, when brands were forced to identify and implement more cost-effective and impactful strategies. No doubt, most were left wondering why they hadn’t invested in employee advocacy sooner.
The average CPC from an employee advocacy program with DSMN8 is $0.76, compared to LinkedIn’s $5.26 (remember, this was when advertising on the site was cheap!).
Plus, brand messages shared by employees have been proven to reach up to 561% further than the same messages shared by the brand itself.
It’s not just getting reach for cheap; research has shown that these posts generate 8x more engagement.
- Better reach
- Better engagement
- Better price
Plus (you don’t need a marketer to tell you this because we are all consumers to some extent, but nevertheless): people don’t want to be sold to in times of economic hardship.
In times of hardship, people want to hear from people, not brands. Buyers want trust and authenticity from companies above all else.
There’s now demand for better CEO visibility, for example, and buyers want to feel like they know the names and the faces behind the company name and logo.
If you want to learn more about why employee advocacy has become the preferred marketing strategy of some of the world’s largest organizations, check out this recent episode of The Employee Advocacy & Influence Podcast, where we get into the numbers and theory in more detail 👇
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People Also Ask
Does Employee Advocacy Work for All Industries?
In a word: absolutely. Some industries tend to gravitate towards employee advocacy more than others. These tend to be B2B organizations that target professional networks like LinkedIn. However, no matter your industry, employee advocacy has the potential to generate the same results. From consumer goods to accounting and even social networks, we’ve seen companies from all industries make an impact with employee advocacy.
What Results Could YOU Expect from Employee Advocacy?
The sky is the limit! However, if you were looking to get some ballpark figures of the results you could expect your organization to generate, check out our Reach Calculator and our ROI Calculator. You can also get a free employee advocacy “health check” that will show you what percentage of your workforce is currently active on social, what impact this is having, and how this activity can be improved.