So what can you do? First, give up the short-term battle. That fight is lost, and it's more important to focus on the longer-term. Preserve Marketing's credibility so you can live to fight another day. That means, among other things, making sure the cuts you make have strategic thinking behind them.
Here are six tips, according to Pat LaPointe and Dave Reibstein of MarketingNPV:
1. Be choosy. You have to achieve the reduction targets that your CEO has set. But don't cut X% across the board -- doing so strengthens weaknesses and weakens strengths.
2. Slash the easy stuff first. Sure, slash the easy stuff (travel, contractors). But be careful with your next steps; consider all your options -- and be objective and thorough:
- If the end is truly near for your company, it might make sense to cut long-term initiatives like branding and keep those that bring short-term returns.
- If, however, you're highly likely to survive the recession intact, then take into account the net present value (NPV) of the anticipated return for each area of Marketing investment -- and keep investing (even if at lower rates) in those with the best returns.
4. Make friends with influencers in Finance, Sales, and strategic business units. Ask for their input, run your analyses by them. You gain nothing from being isolated.
5. Make educated guesses. Don't have the data to support your decisions -- or the time to get data? Make educated guesses. Not sure how? Find out about some of the more common ways, such as Delphi techniques and Monte Carlo method simulation, LaPointe and Reibstein suggest.
6. Know that the outcomes of your cuts will be affected by your competitors' actions. If they also cut, you might achieve results on par with those before the cuts. But if the competition cuts less, or doesn't cut, or actually increases spending... you're likely to lag.
LaPointe and Reibstein conclude: "Exploring possible scenarios with decision trees will help illuminate which types of cuts are smarter, and which leave you open to substantial competitive risks. You may need to cut anyway, but at least everyone in management will better understand the risks."
Next time: What not to cut.