Maximizing ROI from your marketing budget in a recession

Joe Ducarreaux: Hello and welcome to this essential B2B coffee time talk, brought to you by Lead Forensics. I am your host, Joe Ducarreaux. Are you struggling to make the most of your marketing budget during a recession? To discuss tactics on maximising ROI from your marketing budget during a recession, I'm joined by Claire Daniels, CEO of award-winning marketing agency, Trio Media. How are you doing today, Claire?

Claire Daniels: I'm great. Thanks Joe. How are you?

Joe Ducarreaux: Yes, very well, thank you. All the better for chatting to you about tactics for during a recession. In a recession, marketing is normally the first department that can get affected, but in your opinion, what should people still be aiming to achieve even though budgets are tight?

Claire Daniels: I may be the anti-person here on the topic because I really believe marketing should be something that you lean into during a recession and it shouldn't be the case that it's the first thing where budgets get cut. Because we've seen it in examples time and time again….. during the financial recession 2007/ 2008, during more recent financial difficulties during Covid. Actually, the people that continue and keep going and they lean into the marketing and they invest, are the ones that come out fighting and on top when things improve. Whereas, divesting and taking your money out of marketing is a sure-fire way to guarantee you are less likely to survive and to attain market share during a recession. So the first thing I would definitely say is just consider not taking the easy route and pulling everything out of marketing. I understand it can be hard and actually in my experience….. I was client-side strategic marketing for 10 years before coming agency side. So, I've worked on both sides of it. My experience from the client side of marketing is actually, you may spend a lot and you have high budgets, but you may struggle in measuring where the results are coming from for all the budget that's being spent. So, the biggest piece of advice I could give is to really get to know your numbers, get to know the data on what is delivering a return for you into your market budget and efforts. Because ultimately, if you can still generate a return, why would you stop? So, if you can still see you're getting a return on ad spend, you're getting an ROI, your conversion rate is good. With those metrics, there's no argument for stopping. If you're just looking at vanishing metrics like traffic or leads coming in, but you're not actually looking at are we making money off the investment that we're putting in? Then yes, it could be very easy to just think we'll stop and we'll pull away, because maybe the number of leads is dropping. If you're still getting a return on your spend, if you've cut back your spend, you need to be fair to yourself in that you're going to get less leads….but actually is the return still good? So, the biggest tip I guess from this is keeping on top of the data and the results, so you can measure what is working for your business. Because I'm guessing there's going to be B2B, potentially some B2C marketers listening to this as well and ultimately, there's not gonna be a one size fits all approach. Some people may need to lean more into social media, some into more events, whatever their business model is. So, it's not for me to say this is the one kind of channel you should invest in or move away from but actually, what works for your business and as long as that's still working, there's no reason to stop.

Joe Ducarreaux: You touched there on the online side of things, most companies watching this will have some sort of online presence already. What tactics could you suggest to improve their organic online presence? You mentioned there social media as one, perhaps that is a route we can explore.

Claire Daniels: With anything really, if we’re looking for a key tactic, what I would say is consistency. So again, in terms of the type of content you put out is going to vary massively, from industry to industry. If we’re looking at social media, you definitely do need to be leaning into video content regardless of what you do. Whether you are going down a TikTok route or LinkedIn or Facebook or Instagram or another platform, based on where your target audience is spending time and what it is that you do. It's not for me to say it's that particular channel, it's going to work for everyone but whatever it is that works for you. Again, taking the data, which channel generates the best return engagement for you? Where is your audience spending the most time? Then lean into showing up there consistently. I think one of the key things really that I want to get into in this piece, is during a recession the main thing that we need to look at is your messaging. Because, do you need to change the way you are positioning yourself to your target audience to be more accepting and acknowledge the recession. Do you need to think, could we do more sales, could we do more things that are price friendly to people? Can we lean into something where we're not so much acknowledging as if everyone's got loads of income to be spending at the moment? So it's really about, for any business always, it's about understanding who your target audience is. Is your target audience likely to suffer during the recession or not? Because some people won't and then if they are, how should you talk to them differently to how you would normally talk based on the fact they have got less money to spend? So, aside from my work at Trio, I'm a trustee at a charity. So obviously one of our big concerns is, in a cost of living crisis are people going to reduce the money that they donate to charities? We've had conversations about changing our messaging to lean into it. We’ve still got a job to do, we've still got to get donations. So how do we acknowledge that and address it and actually target the people who will not be affected by the cost of living crisis? The people that are affected, who can't afford to pay the energy bills or to have the heating on at night. We can't even speak to those people. There's no point trying to speak to those people but there are loads of other people out there who still have money, so let's go after those people. It is about really just honing in on the people that can keep spending during a recession and how to position yourself to them. So, in terms of that piece around, showing up and your online presence, whether it's on social or across search or anything like that, it's about creating relative content and showing up and being appropriate for your audience.

Joe Ducarreaux: So, consistency and tone. It's almost sensitivity, isn't it? I suppose when times are really tough, it's important to make sure that you are not coming across in a way that you don't want to. So, to go back to your earlier point, you did mention a couple of sorts of KPIs and that sort of thing. What sort of KPIs and goals should people look to adjust or put in place when experiencing budgeting constraints, would you say?

Claire Daniels: So definitely it needs to be looking around return. I think marketers should be measuring this all the time and actually too frequently they're not. So a lot of people may know their overall budget and the overall revenue, but they're not looking at how each pot of budget spent in certain areas is then resulting in what amount of revenue. So, it's about just really nailing down on that. So, definitely return on ad spend, if you're doing any advertising, - what do you get out of what you spend and is that profitable for you? Because if it is and that continues to work during a recession, why would you stop? What is the reason to? You have data to show you can still make money. So, unless your business doesn't want to make money, why would you stop doing that? With anything else, obviously the return on investment. I would say, the areas we might see slip are the places that don't bring as much of a direct return. So, if you're doing PR, for example, it's great for brand awareness and building shareholder value and all these things in terms of getting your brand out there in a positive light. But it's very difficult to measure specific sales and a financial return from PR and PR is usually an expensive investment. So that is one of those areas that obviously if you can't track it and you are not able to demonstrate a return, those could be some of the areas that are likely to slip. However, I would challenge if that was the case anyway and you knew you couldn't track it and you knew you weren't getting a return, why were you doing it? Or if you were doing it and you felt the value, as much as the value isn't financial, are you still seeing that value in other ways? Because that is the reason for doing something like PR. For me, working and running a digital agency, a lot of digital marketing that we do is very trackable and measurable so we can put a financial return on everything that we do. For anyone who's investing in social media, whether that's just the content creation or they're doing any advertising - you can see how many clicks to your website you've had from the social post, you can see how many conversions you've had from social. If you can't see, it's possible you're just not looking in the right places. Not everyone knows how to go find this data, but it's there. Go look for the data in terms of the traffic sources that are driving the conversions on your website…….if that is the place you convert people, whether it be via a form or if it's an e-commerce checkout. But look at those channels that are driving those sales, then look at what you spend into those channels each month and is the return greater than what you spend? Is it profitable for your business? If you're not sure, go and ask those questions. Because actually, what you probably can't see straight up as a marketer is the profit margins. So you know how much money is coming from it but actually, if decisions are getting made by your CFO or FD in terms of profitability…… just go and ask those questions and find out so you can clue yourself up on what's really working for the business, beyond just we generated 300 leads from doing this activity, okay but what did those 300 leads result in for the business?

Joe Ducarreaux: Are there any tools or software that you use to keep track, any tools or software that you use to help you succeed and make sure that everything is in alignment?

Claire Daniels: Yeah, I think everyone in marketing is gonna use Google Analytics and I know it's an obvious one. But actually everything I'm talking about, all that data is available in Google Analytics. It's definitely worth paying attention to it. So going there, being able to look at where your traffic has come from, where your conversions have come from, what's working on your website and what's not, is invaluable. We then work with a piece of software called Agency Analytics that ties in analytics from all the different data sources we use and that's what we use to provide the monthly reports to our clients. So that pulls the data not only from Google Analytics but from Search Console, from Lighthouse, from Semrush, SE Rankings, from Meta, from TikTok, LinkedIn, YouTube, Trustpilot, Shopify, WooCommerce, you name it. Everything can be pulled through into there and that gives a bit of an insight to the tools we use. A lot of our time is spent on SemRush. We do a lot of SEO work for clients. We also use a tool called SpyFu, which allows us to look at organic and paid search for content and strategies for any business. So we can look at it for our clients, but also for their competitors as well. I totally agree, obviously, you need to have what's right in your stack and we regularly do reviews and I'll challenge and question people on, are we using this? Are we getting the most out of it? Otherwise I'm not paying for it. Those are the areas that can sometimes run away with you in marketing in terms of your marketing budget. You sign up for all these things and then the money gets tight and you start going through your bank statements and go hang on, we're spending this much there and this much there, are we using it? I asked that question of my team, literally the day we came back after New Year because I've been looking at everything and I was like, is everything that we're spending money on getting used and adding value to the business. I'll spend more if it is, if you need more. I'm not necessarily making cuts but also I'm not spending money on something that we don't need.

Joe Ducarreaux: And I guess the frequency of those checks will increase, I imagine, in the coming months I'm sure.

Claire Daniels: Yeah, and that's the thing, it's just about being savvy and knowing your data. I always say to the team, negotiate from a position of power. If anyone ever comes to us about anything, we straight away go back with the data. We show them the results they've got and stuff like that. If anyone's ever not sure of the value they're getting, that should be the way we all approach it in terms of we should know our data, we should know our stats on what we're doing. So that actually marketing directors, CMOs, anyone like that or anyone in charge of marketing, if you're getting pressure from other members of the board who are coming to you and saying actually we need to cut back. You've got the evidence and data to say actually what you're spending in this department is delivering you a six times return, whatever it may be. That then gives them not much of a leg to stand on at all. So it is just about getting really clued up on the stats that are going to work in your business to guarantee that you actually can continue spending in the right areas.

Joe Ducarreaux: I want to change tack ever so slightly now, Claire. So I saw the other day you were posting about AI and specifically ChatGPT? What do you think the financial implications of AI will be in the future in terms of marketing?

Claire Daniels: Look, I don't think it's going to be free for much longer. ChatGPT, which is created by OpenAI, which I was posting about on LinkedIn. So, we've started having to dabble around with it because as a digital agency we need to stay on the forefront of technology. We can't shy away from AI just because we all think it might replace our jobs. We have to lean into it and see what support it can give us. But currently that is free. The knowledge and skill that tool has got, it's insane that it can be used for free right now. But I think it's to drive adoption and I think very quickly people will start paying for it. I was having a conversation with a tech expert that I know on LinkedIn….. and don't quote me on this because I don’t know where he got his figures from…… but he said that it's costing something like $3 million a month to run ChatGPT on AWS. So, there's no chance that can continue for free for much longer. I actually think it's going to start being chargeable. So, I'd probably encourage people to start seeing how they could get value and benefit from it whilst it's free to then learn whether this is something that's worth investing for them in the future. In my opinion, I definitely see AI working alongside marketers. It's not going to replace anyone's job. I really don't think it has the grounds for that but actually it's going to make us all a lot more efficient if we can embrace it in the right ways. For example, I was on a Google meet earlier that I wanted to record. Now you can transcribe the recordings on a Google Meet, I could transcribe a meeting, I could then put the transcription into Chat GPT and ask it to summarise the key points from the meeting. Straight away, that then gives me my follow up for the meeting or whatever it may be. Or if we were recording this and transcribing this right now, you could then get a summary of it to put out. This is just making our jobs far more efficient. So, I don't think it should replace the human touch of being able to create content that appeals to different target audiences. This tool can't speak as a 20 something woman, if that's your target audience, you need to speak in her tone of voice. You need to speak the tone of voice of a 30 year old male for another campaign. It is not going to be able to get to that. Maybe it will one day, so I could be speaking out turn there but I don't think it's there yet. But I think it's definitely something that will work alongside us and the recession could slow its adoption, if it does start charging and people aren't ready to invest in new technology. They want other people to test it out first, wait for it to take up more mass market adoption, then maybe more marketers will start getting involved in it. But, I would definitely recommend giving it a go because we're already seeing advantages to us in our business.

Joe Ducarreaux: It is very encouraging. The more webinars and podcasts I do under the essential B2B banner, the key message that I keep receiving again and again is people buy from people. So it's really encouraging to think that you don't think that the AI could take that human element out yet, so we'll all be in a job, so that will be nice.

Claire Daniels: Yeah, exactly. Don't get me wrong, I think absolutely there'll be a version of this where an avatar could come on and have a conversation with you and completely do this podcast and probably give you even better advice than what I've given. But it's not real and none of us want that, we don't want to be engaging with robots. It is quite a fun trend at the moment and people are getting AI versions. Like submitting a picture and getting the AI versions of themselves created because it's a bit of fun. As soon as you step over the line and go, okay, that's now the version of you and people aren't interested in the real you, they're going to interface with the AI version of you Instead….. Everyone's going to rule them out at that, I think because we're just not ready for it yet. It's going to help and support us but definitely you need a human touch at every stage of the work that we do as marketers. From dealing with people and talking to people, to the content you create, to the ideas you have. It's not going to be able to think of ideas. If someone comes to you with a business and a new campaign and says, tell me what I should do….. it's not gonna have that…. yet!. Don't quote me on anything because I'm not an AI expert and the technology is probably far beyond what we're even dabbling in right now. But that's just my opinion on where I think we are today.

Joe Ducarreaux: Let's come back in five years time, Claire and then we'll see if you can detect if I am actually a robot or if I am my authentic self. Claire, this has been a really fascinating conversation, I've really enjoyed speaking to you again. If I could push you for one top tip for everybody watching this about maximising your return investment during a recession what would that one tip be?

Claire Daniels: Get to know your data. Because like I said, there is no one size fits all. So you've got to figure out what works for your business and actually, from my experience, not enough people do know what's going on to the level of ‘we know this is resulting in that’. So, get to know your data. Know it inside out and when someone comes knocking and asks you to reduce your budget, slap them across the face with….actually, this is working fine and we'll keep our budget please and actually if you give us more, we can sail our way out of the recession because we know what we're doing is working.

Joe Ducarreaux: Fantastic. Claire Daniels, thank you so much for joining me.

Claire Daniels: Thank you.