It has been a few months since the Coronavirus pandemic affected so many small business owners. One of the questions that have been constantly asked recently is what should your marketing budget be, even with this post Coronavirus situation.
I’m going to give you a couple of different scenarios and situations, and I will tell you upfront that I am very much in alignment with everyone else that has a marketing background of suggesting to maintain the course. However, I’m going to give you a few variables and different situations that you would want to consider.
FIRST SCENARIO: BUSINESS IS CLOSED
If you’ve got a restaurant, a bar, a club, a nail salon, or a fitness gym, what do you do if you are closed? You have a few different options that you can look at taking.
Option 1: Tell your customers you are currently closed. Straightforward as you can be.
Option 2: Get creative
Option 3: Maintain the status quo
What I mean by maintaining the status quo is that you continue advertising but you change the messaging.
Most of the businesses that are closed right now are actually asking, “what should we do from an ad spend standpoint? Should we stop our radio ads and our digital ads?
Keep in mind that today’s topic is not about budgets—we are not talking tactics, instead, what should you be investing in?
So, here are some things you can do if your business is closed. If you’re closed, I’d like you to reduce your budget to 50% until we start to see the light at the end of the tunnel. I don’t want you to go to zero, but I also don’t want you to go to between 150% to 200%. There are a lot of people that are out there touting now is the best time to be investing, because ad costs are going down. And that is a factual statement—ad costs are going down.
However, if there are certain businesses that are closed, and they’re typically a quick turn purchase, so someone might see something for a restaurant and that kind of strikes and there’s some conscious thinking about ordering dinner later, so they are basically going to stop by and order food.
Unless you have some way to be selling something virtually, my recommendation would be to reduce 50%. I still need you to keep your brand out there—I still need you to be top of mind because your competitors are most likely turning everything off and in good faith if you were coming close. And again, unless you have some other way to generate income and revenue, I can’t advise you to increase your budget—it does not make sense at this moment in time if you are completely closed.
Now, the Asterisk to this is that you need to be keeping a pulse. And when you start to see the light at the end of the tunnel, I need you to turn those budgets back on. And I want you to turn them back on and add an additional 25 to 50%.
So let’s just use simple math. If you’re investing $1,000 a month, I want you to go down to investing $500 a month and the content should be branding related. Keeping you top of mind obviously, there’s no call to action of “come in today or come pick up your food” because you’re closed. But you can still be running branding ads to stay front and center. Now that doesn’t have to simply be paid traffic—that $500, you could be leveraging that to produce video content, audio content blogs for your website. I mean, that that money can be invested in whichever way makes the most sense for you.
But when you start to see the light at the end of the tunnel, and things hopefully start to look up in the coming weeks, I want you to start to ramp your budget back pretty quickly, because your competitors are going to turn their stuff back on. They’ll probably go back to the levels that they used to invest, and that’s when I’m going to want you to grab their market share. So not only are you going to stay top of mind because most likely they’re paused, but you’re also then going to outspend them in the future as well. So you’ve got to make sure that you’re maintaining your brand. And then you are ready to rock and roll when things start to look better.
SECOND SCENARIO: BUSINESS IS OPEN
If you’re currently open, my advice is going to be quite different.
Option 1: Scale up your marketing budget
Option 2: Step up and be creative
I want you to be investing anywhere between 125% to 200% of what you’ve been investing. Let’s say, if you’ve been investing $1,000 a month, I want you investing from $1250 to $1500 all the way up to $2000. I want you to do that because ad costs are definitely down at the moment. They’re down compared to where they’ve been. So if you’ve been investing $1,000, you’re going to get the equivalent of your investing, give or take $1300 to $1400 dollars a month. So if you’re investing $2,000 a month, you’re getting the equivalent of a 20-$500 a month plus budget. So I want you to be investing more if you are currently open.
Now you might wonder how to do that when your revenue is down 80% or 50%, or whatever the number is.
It’s a tough situation. But you need to bet on yourself and your business, if you want to come out of the storm with something left, because the businesses that are going down to bare bones, they are not going to survive this, plain and simple. They’re just not. And the reason is that it’s going to take some time for this economy to recover. So all of your past customers aren’t just going to magically come rushing back to your location or back to your business. They’re going to be gun shy for a while.
What I need you to do is step up. I need you to step it up from what you’ve been doing. I need you to double down and invest in yourself and your business to know that anything that you invest now is going to pay off dividends in the future.
Now, the only way in good faith that I couldn’t recommend this is if you literally can’t put food on the table. And in that case, it’s probably better off for you to close down your business. There’s obviously a lot of different loans and things like that. And you want to make sure you’re exploring all those options.
But for most of you, I mean, throw it on a credit card, there are zero percent interest credit cards, you can’t just go down to zero, and just hope that things are going to magically improve. I need you to stay top of mind. I need people to see your brand constantly. I need to let them know that you’re still open, that you’re still taking business that you’re here for them. I want them to see you as a thought leader. I want you communicating with your current customers, past customers, or prospects, more than you ever have before.
CLOSED BUSINESS: SCALE YOUR BUDGET DOWN TO 50%
OPEN BUSINESS; SCALE IT UP BETWEEN 25% UP TO 100%
Now I did an episode on how to nail down what percentage of spend you want to use compared to your marketing budget and sales and all of that, I’d encourage you to re-listen to that.
But for now, I’m not looking for you to drastically revise your marketing budget. I’m looking for you to establish some consistency and continue to keep your message out there. Take some action today. Get those budgets rolling. I promise you that in the next couple of months, you will be thanking me.
Get out there, make a change and take some action.