Based on observations from deep inside dozens of large marketing and finance organizations, there appear to be five patterns of how “doing more with less” works.
First, the best clearly define what “doing more with less” really means. The most common metric appears to be “marketing contribution efficiency”—an increase in the ratio of net marketing contribution per marketing dollar spent. This seems appropriate when budgets are falling (recognizing the need to monitor it over time, as it can be manipulated in the near term).
Second, they cut strategically. Most of us didn’t take budget cutting 101 in business school. After eliminating travel, and consultants and other easy stuff, bad decisions creep in under mounting political pressure. If you’ve made cuts across the board, or cut proportionately to a percentage of spending, you’ve been there. “Successful” cuts are smarter and in line with strategy for competing both today and tomorrow.
Third, they watch the risk factors. CFOs want to cut marketing spending to increase the likelihood of (aka decrease risks against) making short-term profit goals. Yet when marketers try to do more with less, risk exposure rises in ways never imagined—especially if it wasn’t clear which elements of the marketing mix were working before the cuts.
This is the “risk paradox.” If you want to make sure your “less” really has a chance of doing “more,” manage the new risks that have silently crept into the plans.
Fourth, they avoid the “ostrich effect.” Just because there’s enormous pressure today, the best don’t ignore the fact that tomorrow is right around the corner in the form of a 2010 plan. And when looking ahead, the only thing certain is that historical norms are no longer a reasonable guide. So the best are anticipating the key questions for their 2010 plan and working on getting some answers now. They’re committed to leading the process, not getting dragged behind it.
Finally, the best push their marketing business case competency further faster. The marketing skeptics and cynics have more political clout now. Untested assumptions, like ostriches, will not fly. Better business case discipline is the new currency of credibility.