Even the best laid plans go awry. You may have entered 2017 with a substantial backlog of orders, a low inventory count, reduced costs and multiple contractual agreements. However, it’s a reality of business that no matter how well you’ve planned, how much new business you’ve secured, or how well you’ve controlled your costs, at some point something could go wrong. When it does, you must adjust. Understanding how to pivot, and what impact a change of your budget has on your digital marketing efforts, is critical to hitting the ground running in the second half of the year.
Identify the Shortfall
Where did you go wrong? Identify what happened and why. Your company may have over purchased inventory based on a series of customer promises and contracts that were either canceled or didn’t materialize. You may have purchased more than needed due to longer vendor lead times. Perhaps your variable cost structure increased beyond your anticipation as your business volumes grew. Or, maybe you lost a major customer. Regardless of what happened, isolate the root cause and identify an actionable plan to correct the issue moving forward.
Understand Where You Went Wrong
Identifying the mistake is one thing, but understanding why it happened is another. Did you ignore your historical sales trends and business cycles in favor of a more aggressive sales budget? Did you ignore existing customer relationships because you were enamored with new business? It’s a common occurrence for companies to take their best customers for granted until it’s too late.
Companies focusing on new business growth sometimes exclude long-term partnerships from the most proactive digital strategies. Instead of increasing customer engagement with all customers, companies may opt to focus on new digital strategies that completely ignore their long-standing customer base.
Define the Impact on your Digital Marketing Efforts
So, what does this mean for your digital marketing budget? Will you have to cut back and if so, where? Better yet, maybe you can still pursue your plans but on a much smaller scale. Maybe you’ve committed to moving forward with your digital marketing efforts regardless of any decline in business. Ultimately, if you’ve decided that you must cut back, identify the strategies you simply can’t do without. A good rule of thumb is to keep the customer engagement strategies as is. This means continuing publishing high-quality content, pushing new offers and incentives through email marketing, and maintaining a strong presence on social media.
Implement a Series of Triggers Within Future Budgets
Let’s assume your shortfall was an excess of inventory counts. This can easily be resolved by having a trigger within the budget that pushes additional inventory purchases once a contract is awarded – and not before. Maybe your trigger comes into effect once you exceed sales by a certain percentage, thereby allowing you to increase a portion of your digital marketing budget. Maybe you have a trigger if you miss sales forecasts. Ultimately, a trigger offers that all-important buffer between go-live initiatives and budget readjustments.
Your budget doesn't have to be set in stone. In fact, most companies consider a budget assessment and periodic review a key best business practice. Just be sure to understand what mistake was made and how you can correct it moving forward.
The bottom line is, a flexible digital marketing budget is necessary; it should adjust according to the seasonality of your business and easily be adapted to your existing requirements. Contact us for more information.