With wider predictions of an upcoming recession, many CFOs are taking a look at quarterly revenue forecasts and asking, “What do we need to cut?”
When the economy is strong, organizations invest heavily in growth. Cutting back on those investments is a tricky balance between strengthening your company’s finances in the short-run without harming its growth potential once the economy recovers.
By improving the efficiency of your sales and marketing team, you should be able to make some strategic cuts without damaging growth.
Here are a few areas organizations can trim budget while staying strong — and in some cases getting stronger.
Events
One place to start shaving off costs is your events budget. This doesn’t mean you should abandon events; they’re a critical avenue for building relationships with customers, potential partners, and suppliers.
You can — and should — keep field-marketing hosting events, but look for ways to get the most out of a smaller budget. For example:
- Many organizations hold major yearly events for their customers, which are necessary for networking and building positive associations with their brands. But attendees can still have fun without pricey live bands and celebrity speakers.
- Giveaways can be a fun way to boost engagement and get contact information, and they can still be exciting with prizes of lesser value.
- Think about what goes into your “swag bags.” Are their contents reasonably priced items that customers will use and associate with your brand? Or are they a wasted spend that will end up in the trash?
- Consider running online or hybrid events to reduce travel costs, venue rental fees, expenses for onsite food and refreshments, swag and giveaways, etc.
- For in-person events, reduce the number of representatives attending. Do you need to pay for flights and hotel rooms and registration fees for 20 reps when 10 would suffice?
- If you’re treating event attendees to a meal, keep in mind that they’ll likely be just as excited about a free, fun “Taco Tuesday” experience as they will a sushi dinner.
- Get help from an event management platform that can help you host events, optimize your event program, and measure and maximize your return on event (ROE) with rich data and insights.
You can also use ABM marketing practices to generate more pipeline from events.
Before the event: Use keyword targeting and campaigns to identify attendees and book meetings ahead of time.
After the event: Send follow-up emails and campaigns to help keep your brand and message top of mind and pave the way for future outreach.
Consolidate Tech Tools
Implementing new technologies can improve efficiency and productivity, and that can be useful if you’re looking to reduce staff or freeze hiring (more on that later). But the more tools you add, inevitably, the more budget they consume.
Spending on technology is a wise way to invest in the future success of your organization. Just keep in mind that when it comes to marketing platforms, more doesn’t always equal better, and consolidating tools can help strike a balance between efficiency and costs.
Your revenue team likely uses an amalgamation of tools to carry out tasks such as:
- Account management
- Content creation and delivery
- Social outreach
- Email campaigns
- Advertising
- Data analytics
Many tools only serve a single function, which means that for each of the tasks above, you’ll have another line item on the expense report.
Instead of managing and paying for disparate tools, you can reduce costs by unifying your marketing tools with a revenue platform that does it all. 6sense is a platform like that. It has comprehensive, built-in capabilities that help our customers consolidate their tech stacks while making a greater impact on the bottom line.
While our platform is designed to play nicely with, and enhance, other marketing tools, it also provides direct solutions for:
- Account identification
- Intent data
- Data enrichment and management
- Predictive modeling
- Orchestrations
- Audience building
- Engagement personalization
- Programmatic display advertising without markups
6sense also sends insights directly into CRM contact records, delivering instant insights to sales representatives working to close deals with high-value accounts.
Top-of-Funnel Ad Spend
While looking for ways to trim down ad spending, it might be tempting to cut out top-of-funnel ad spend.
If few companies have a budget for new solutions, trying to woo new customers will be a wasted effort. Or so you may think. Many B2B companies axe their ad spend during recessions.
Before you cut out top-of-funnel ad spend completely, try switching to a more strategic approach. Instead of targeting your total addressable market, apply account-based techniques and go after your in-market ideal customer profile. These are potential customers that:
- Are most likely to buy from you
- Most likely to be profitable for you
- Most likely to be satisfied with your solution
- And in-market to buy now.
A data-backed, AI-driven revenue platform — like 6sense — can help you identify your IICP, as well as target them with digital ads.
The reduced competition for ads will likely boost ROI for brands that maintain an ad presence. Less competition equals lower CPMs. Less competition also means you’ll have a chance to dominate mindshare and increase brand recognition among your target customers.
Hiring
We’ve saved this section for last for a reason: Reducing headcount is one of the most difficult choices organizations have to make when they need to cut costs. Sometimes it’s unavoidable, and organizations are forced to part ways with talented individuals. But if you can avoid it, you should.
Labor is undoubtedly a major expense, and hiring freezes should be considered as a way to keep labor costs down before laying off existing staff. Layoffs will help get costs under control in the short term, but it’s critical to think about the impact it will have on future revenue generation.
Recessions last an average of ten months. If you reduce headcount now, how will your organization be positioned a year from now when the economic situation improves? When a company lays off large portions of its workforce, including entire departments, it’s trading long-term growth for short-term savings. Here’s how:
- Laying off talented team members results in lost organizational knowledge and expertise. This brain drain will leave remaining staff scrambling to fill in the gaps. Multitasking and inefficient processes ultimately lead to lost productivity and revenue.
- Remaining employees face increased pressure to perform, leading to burnout. Employees may stick around during the worst of the recession, but once the job market improves, they may be attracted to positions elsewhere, leading to even more brain drain.
- When the economy is on the upswing, lean teams lack the robust revenue engine needed to take advantage of new opportunities. The potential revenue a skeleton crew misses out on during the time it takes to rebuild your revenue engine could be much greater than the amount you saved by paring down the team.
Marketing technology can help improve productivity and efficiency, especially solutions that put everything your revenue team needs all in one platform. Technology can also help when it comes to labor by offering automation and streamlined processes.
If you do need to implement a hiring freeze (or worse), the right tech can help your remaining employees stay focused on the most important revenue-generating activities. It also puts them in the best position to keep hitting goals in spite of challenges, so they can keep the company healthy and maintain their own confidence through the downturn.
And once the economy recovers, technology can help you quickly ramp up the productivity of new hires so they can seize new opportunities.
Conclusion
During a recession, it makes perfect sense for organizations to keep a careful eye on spending and cut back on activities that don’t significantly move the needle.
But you can proceed with confidence. Advances in AI mean that there’s a much clearer roadmap for maintaining growth. 6sense Revenue AI™ is a powerful revenue platform that helps sales and marketing teams boost efficiency, reduce costs, and grow their businesses with a laser focus on ROI.
