Navigating Budget Cuts

Never is a budget cut welcomed. Hearing “we’re cutting our budget,” can appear to be an encroaching disaster for a marketing department and their hired agency.

When a marketer’s budget is cut, there’s a lot on their mind. The first emotion is sheer panic and once that has subsided, they often go into a defensive mode. Once the shock settles, marketers must decide the most effective way to proceed.

Depending on the urgency of the budget cut, rash decisions can be made that ultimately affect a company’s future impact. CMO’s start asking themselves, what’s easy to cut from the budget: employees, social media marketing, market research, specific projects, or their agency?

To avoid a future blow, marketers must decide what’s the sure bet, what has the most promising future impact and can earn the most revenue. The agency should be the sure bet. But sometimes marketers can still question the money spent on an agency and ultimately decide to cut their budget.

Agencies have the same reaction to budget cuts. Shock.

When an agency’s budget is cut, there is a lot on their mind too. They now have less of the work as planned. The agency is thinking about their traffic flow. Asking themselves, is there another opportunity to backfill and make up the lost revenue?

But this isn’t the end of the world, for the client or the agency.

Agencies must decide how to continue generating a profit with a decreased workload. The client is worried about meeting their end goals. Amidst all of the turmoil, both are also required to concentrate on their current working relationship. In an ideal world, this relationship is more like a partnership, and the client and agency can navigate the budget cuts together.

Although the budget might be cut in half, the client’s upper management still expects the same or even better results as before the budget cut. The agency is required to do more with less.

In order to have the best relationship, as the client you must understand the value of your agency. Instead of thinking about what to cut from your marketing campaign, think about using the partnership to fine-tune every dollar to be a more effective spend. Remember, agencies are experts in working with many clients with different budgets and challenges.

To accomplish everything necessary within the smaller budget, the client and agency must both understand the strategic plan for their work. They must pinpoint the most important tasks and projects to best proceed. Both sides should be transparent in their expectations and continuously maintain open lines of communication.

As the client, don’t get too comfortable with the same time-tested tactics and strategies you have been using for 15 years. Sometimes there is a newer, better opportunity to promote your message and reach the desired target market. With a smaller budget, it may be necessary to take more of a risk and try something you have never attempted before. An agency is responsible for pushing your limits and ultimately achieving success.

Although budget cuts may seem like a nightmare, it’s not the end of the world. By communicating openly and increasing efficiency with stet agency, you can create an effective marketing plan to meet all of your ultimate goals.