As in Part 1 and Part 2, each of these tactics are designed to help you cut costs out of marketing without cutting the meat of your programs that drive opportunities. However, these last few ideas are closely connected to organizational culture.
Evaluate the Money Pits
As promised, in Part 3, I will move up the ladder to the tactics that senior management is usually responsible for. It’s possible that midlevel managers can also take some of these approaches in some organizations. But, regardless of who is responsible, the decision to use these cost cutting measures should not be taken lightly.
As in Part 1 and Part 2, each of these tactics are designed to help you cut costs out of marketing without cutting the meat of your programs that drive opportunities. However, these last few ideas are closely connected to organizational culture.
Evaluate the Money Pits
This is similar to the sacred cows I mentioned last time, but I want to expand this to include an example for those of you who market through a channel. I’ve spent my career in business to business software sales and marketing. An example of a potential money pit in this industry is the reseller co-op program that is common to so many large software developers.
For those of you who may be unfamiliar with co-op programs, many large software developers allow their VARs (Value Added Resellers) to earn funds that can be spent toward qualifying marketing campaigns or business development programs. VARs earn these funds based on their annual sales volume.
Before I make an enemy of all my friends and colleagues that work in these organizations let me say that co-op programs, in theory, are great. Ideally it should motivate resellers to increase sales. And, theoretically, VARs with higher sales are going to make more effective use of the marketing dollars.
In my twenty year career, I have never seen a co-op program that delivered a demonstrable return on investment to the software company that funds it. I believe the problem is in accountability. Usually, VARs are required to submit proposals for how they are going to spend the money. The problem is that there is no follow through to determine how the money was spent and no effort to measure the campaigns success.
No in-house marketing department would get away with spending the money that gets invested in these programs with no effort made to produce or report on results. A company under pressure to cut marketing costs should take a close look at the accountability of its co-op program. It could be far more effective to bring the marketing in-house, establish benchmarks and accountability for the campaigns, and create opportunities on behalf of the channel.
If it’s not obvious, the reason this is a senior level management decision is because companies who sell through channels rely heavily on the goodwill of their channel. Any decision that could be seen as negative by the channel needs to be evaluated carefully. And, once decided, it needs to be carefully communicated. Those of you who have been in this position know exactly what I am talking about.
The Hiring Freeze
This is a common strategy used by companies that are trying to cut costs. Usually, hiring freezes are temporary and designed to get the company through a rough quarter or two.
While managers who need to add key roles tend to hate hiring freezes, I like them for two reasons. First, it gives business leaders a chance to slow down and carefully evaluate the headcount requisitions. For publicly held software companies, revenue per employee is an important metric. Full-time headcount should not be added lightly.
Second, it stops the empire building. I have worked with more than one manager who judged their success more by the size of their team than the results they produced. Sometimes, it’s an ingrained part of the corporate culture so it’s less of a personal failing that a matter of corporate survival. However, I don’t think it is healthy for the organization and a hiring freeze is as least a temporary reprieve.
Hiring freezes are usually c-level decisions. However, managers at any level in an organization can take it upon themselves to make wise hiring decisions. Go ahead and be unique. Dare to buck the trend and produce amazing results with small teams!
I have one last suggestions, but it’s such a meaty one that I have decided to leave it for the next post. I think it deserves to stand on its own and I can’t wait to share it with you.
No comments:
Post a Comment