The economics of marketing - shrink it at your peril

There's loads of research saying if you cut your marketing budget during tough economic times you won't survive with the strength you could if you just towed the line. And yet, there's more businesses cutting their marketing budgets than there are businesses getting smarter about how they spend their money.

I've had the pleasure of dashing about presenting Marketing Bootcamp for Small Business - Your recession survival toolkit to a number of organizations over the last month. The session discusses the importance of not cutting your marketing budget and shares important information about how to get the most bang for your buck. I've met some pretty terrific small business people who are suffering cutbacks and, in most cases, they've felt they have no choice but to cut their marketing budget.

The key thing to remember: If you cut your marketing budget, you are effectively lowering the amount you talk to your customer. At the very least, you are lessening the quality of the conversation. And if you aren't talking to them, someone else is.

This is why companies with their marketing budget intact, even during recessionary times, grow larger and stronger while other businesses close or panic. It's all about continuing the conversation.

Small businesses waste an extraordinary amount of money in their marketing. And they don't understand that marketing is actually a revenue stream - not an expense line (accountants will argue this, but it's simply true that marketing is the top of your sales funnel - without it there's no support for your sales force and no mechanism for relationship development with prospective customers). For many small businesses, marketing is simply a necessary evil that is the first thing to go when money is short.

In my book, Muddled, meager and messy - Marketing performance repair manual for small business there's information about how to make better use of the money you have. In cases where you get smarter, you can actually pare back your spend because you're getting more results.

The media has done a bang-up job of putting recession fear into every business person's heart. Take that fear and turn it into smarter business. Every marketing tactic should be able to be defined by the relationship it builds with your customers. If there's no relationship definition, you should reconsider the tactic.

Bottom line: If you have to cut your marketing budget you'd better get smarter about using the money you have. Heck, even if you don't have to cut your marketing budget, you should get smarter because customers are going to become more discriminating in their purchases.