Delivering Impact When Your Marketing Budget Drops Like 2014 Corn Prices
Like the farmers we help support, marketers in the agricultural industry are finding they are having to produce more – do more – make a bigger impact – with less. It has become a necessity out of agriculture’s current circumstances where production soars, prices drop and farmers tighten their belts when it comes to purchasing key items that support their operations. That means sales for agribusinesses that support farmers have taken a hit as well.
When sales decline, it’s typically the marketing budget that takes the first punch. Even though we know it helps fuel both current and future sales that are mission critical, it can also be the toughest area to show return on investment. So the marketing budget drops like a rusty silo in a windstorm, leaving the marketing team to adapt by figuring out new ways to accomplish at least the same results (if not more) using significantly less.
But there’s hope! Necessity becomes the mother of invention, providing marketers the opportunity to do things more efficiently and with more impact. It comes down to re-evaluating priorities, assessing previous plans and tactics, taking action early, and ensuring measurement is always included in plans no matter the budget.
Identify your priorities
To begin, revisit your mission. Regroup with your team or leadership and determine or fine-tune your key objectives. What does success look like? What is the outcome everyone would like to see? What are your highest priorities? From there, you can shake out needs versus nice-to-haves or “this would be really great if” tactics. It allows you to focus on the business-critical elements that everyone in your company or organization will agree on.
With your updated priorities in mind, evaluate what strategies or tactics you’ve completed in the past that still work. Assess them to determine the actual resources (time and money) it will take to get the job done.
As you evaluate your needs, it’s important to understand that you can’t be all things to all people. Focus on being two miles deep and two miles wide vs. two inches deep and ten miles wide. That may mean supporting only a few brands or products, but developing full marketing campaigns that drive messages to a core target audience.
You should also evaluate how best to use your in-house team. For many companies, smaller marketing budgets mean pulling the work in-house. However, many times in-house marketing staff get cut with the budget or those staff members on board are asked to stretch their skills across many projects and focus areas. It’s important to assess the key strengths of your team and keep them focused on those aspects while outsourcing other functions. The result will be a more efficient use of time and dollars while delivering greater impact.
While the upfront identification and evaluations are important, don’t let it paralyze you from making a plan and taking action. For row-crop agriculture, you must work ahead. Right now, many of the decisions for the 2017 crop year have been made, and farmers are making adjustments as they need to throughout the season. But marketing plans for 2018 should start happening now with finalization targeted for mid-summer. That ensures any strategies or tactics you’ve identified can be put in place by harvest, so your product/brand is top-of-mind when they consider locking in to early buying programs.
With smaller budgets, the tendency may be to approach one project at a time. The reality is that although it may seem like you’re spending less with one-off projects because you’re not locked into a total budget, it will actually cost you more in the long run. One-off projects are budget killers. By developing an annual plan, everything you do will support your objective and you’ll realize efficiencies by looking at tasks from the big-picture vantage point.
As you develop your annual plan, be sure to include measurement since it will help you assess the effectiveness of a particular strategy or tactic to determine if you need to make refinements or try something different entirely. Most importantly, it helps you show the outcome your efforts helped produce, so you may share return-on-investment results with company leadership. According to a survey of chief marketing officers conducted by Duke’s Fuqua School of Business, the American Marketing Association and McKinsey & Company, only one-third of marketers said they can quantitatively demonstrate the impact of marketing on their business, while the remaining two-thirds are experiencing more pressure to prove the value of their efforts to CEOs and boards of directors.
The unfortunate reality is that budget cuts happen all the time. U.S. net farm income is forecast to decline in 2017 for the fourth consecutive year. Sales decline, policies shift, leadership changes. Things happen. The key is to take the opportunity to refine your priorities, evaluate what you can do in-house and what is best outsourced, and develop an annual plan early in the season that incorporates measurement.
Woodruff has been working with agriculture clients to develop plans and serve as an extension of in-house marketing teams for a quarter of a century. We’ve seen the ups and downs of the farm economy and are happy to help agricultural companies make an impact with their target audiences no matter their marketing budget.
- CMO Survey – Duke’s Fuqua School of Business, The American Marketing Association and McKinsey & Company – August 2013
- Marketing Is Increasingly About Doing Less, Not More