The First Cut is the Deepest

Looking for ways to cut costs? Think twice before touching the marketing budget


Illustration Kyle Metcalf

If you want to survive in the business world, you have to have the right gear, and marketing can certainly be one of the strongest tools in any business owner’s toolbox. But is it absolutely necessary to keep this tool in use during harsh economic times? Can the marketing budget, left intact, become a detriment to the future success of a business? Alberta Venture talked to marketing and business experts to find out.

“My answer is absolutely not – I don’t think it’s a good idea to first cut the marketing budget,” says Tara Kelly, ­president and CEO of Splice Software in Calgary. Formed in 2007, Splice Software provides human voice messaging and interactive voice solutions. “You should look at all of your budgets, but the number one thing you should look at is cash flow because often that’s the driving problem,” Kelly says. “Make sure you find out where the real issue is coming from.” She also says that now, more than ever, customers need to think about you and choose you first. “What you need to do is sharpen your pencil on what you would call cost of customer acquisition,” says Kelly. She adds that if you understand where your spending is going, then you should first look at customer acquisition and adjust your marketing efforts ­accordingly. “Doing a re-evaluation on cost of customer acquisition depending on how you segment your business is what you really want to look at in the beginning,” she says. And marketing, of course, is the gateway to new customers.

ATB Financial’s vice-pres­ident Ed Straw is even more ­emphatic. “Don’t cut ­marketing!” he says. “Just because you’re in a downturn, ­it doesn’t mean people are going to find you. Marketing is ­something you have to do to maintain awareness [of your business]. You can do it differently, but you still have to do it. Otherwise, it’s a death spiral.”

Dart Wooden, the business advisor team lead at Business Link, a government service for entrepreneurs in Alberta, agrees that the marketing plan should be analyzed – always, of course, but particularly now – and changed accordingly to market trends. “If you’re no longer getting the results, it’s time to pull the plug,” he says. Step back and re-evaluate the method of advertising that’s most effective for your business.

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