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Recession Marketing, Part I: What to Cut

April 22, 2009  

Welcome to MarketingProfs' inaugural issue of Marketing in a Downturn. We are glad you signed on to receive these once-a-week guides to navigating rough economic seas—and safely making it through to the upturn. We will chart this course together. But if you wish to opt out, just click on the link below.

Let's set one thing straight right from the start: In a recession, you can't not cut—no matter how many articles claim that marketing budgets shouldn't be slashed. That battle is lost, so let's focus on the war. According to Pat LaPointe and Dave Reibstein in a recent MarketingProfs article, that means making sure the cuts you make have long-term, strategic thinking behind them. Some of the tips they offer:

Be choosy. You must achieve your CEO's reduction targets, but don't cut X% across the board; that just "strengthens weaknesses and weakens strengths," LaPointe and Reibstein say. So pick and choose.

Ditch the money pits. Which customer segments, product groups, and channels have the least value (return on the dollar)? Stop throwing your marketing dollars at them.


Slash the easy stuff (eg, perks, contractors). And if the end is near for your company, it might also make sense to cut long-term initiatives like branding, and keep those that bring short-term returns. But if your survival is a certainty, consider the net present value (NPV) of the anticipated return for each area of investment—and keep investing in those with the best returns.

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