Cost-cutting initiatives can either be planned, such as when a brand needs to address profitability issues, or the result of unanticipated changes in the marketplace, such as Brexit or the 2008 financial crisis. Regardless of the trigger, savvy marketers approach ongoing marketing operations cost optimization with rigor. Improved operations costs can exponentially impact marketing results since they touch the entire business, not just one campaign or program.
Use seven cost optimization questions to move beyond the low hanging fruit of reactive campaign cutting to deliver sustainable, comprehensive cost optimization and assure your organization considers savings opportunities across the entire continuum of opportunities.
Ask these seven questions to identify cost optimization opportunities in marketing operations:
- Eliminate — Can the cost be removed completely from current or future spending?
- Simplify — Are there opportunities to reduce operational complexity by eliminating duplication?
- Utilize — Can we get more use or value from existing resources?
- Standardize — Can we reduce variability and deliver greater efficiency by defining common tasks and processes?
- Centralize — Can we achieve economies of scale and more effectively leverage resources through centralization?
- Automate — Can we reduce or eliminate manual procedures?
- Renegotiate — Can we rationalize partner or provider portfolios, or recalibrate business relationships?
Focus the questions on people, processes, technology and partner relationships. With 27% of marketing budgets spent on technology, marketing technology is a large target for potential cost optimization and a useful example of how to apply the seven questions. Some questions will offer greater opportunity for impact while others may not be relevant at all, depending on the specific area.
Apply the questions to marketing technology
Five of the seven questions in particular uncover compelling cost optimization opportunities in marketing technology:
- Can we eliminate unnecessary marketing technologies? Focus on tools or technologies that are not actively utilized. Finding and discontinuing any unused solution will be a quick budget win.
- Can we simplify our technology stack? Rationalize your portfolio of technologies after getting the quick wins. Consolidate and reduce the number of solutions while retaining support for marketing business requirements.
- Can we utilize the tools and technologies already available within the organization? Underutilization is typically tied to inadequate training, unclear ownership or staffing. Assess the utilization of current tools and invest in the staffing and training needed to maximize the value of current technologies.
- Can we standardize on platforms and tools? Standardize the technologies themselves and leverage technology to templatize projects, campaigns, reports and other aspects of marketing operations.
- Can we renegotiate technology licensing agreements? Actively review your technology portfolio every year, and renegotiate licensing relationships to focus on alignment with core marketing goals.