Your Puny Marketing Budget is a Weapon

Did you ever wonder why big companies have such boring marketing? I’ve heard lots of theories about this – they don’t like to take risks, they make decisions by committee and the good ideas get watered down or they do boring marketing because they have always done boring marketing. Having worked in a few big companies I can say I’ve seen all of the above but that isn’t the real reason.

Big companies have boring marketing because their budgets are too big to inspire them to be more creative.

More Isn’t Always More

I know what you’re thinking. You’re thinking that there is absolutely NOTHING wrong with having a big budget and you’d like yours right now thank you very much.  But my experience has been that I’ve done much, much better marketing with almost no budget than I have when I’ve had a massive budget.

Have you ever gotten a big bonus? You’ve seen this happen. For weeks you eat lunch at restaurants and get your coffee at Starbucks. You park in the expensive lot that’s close to work because it’s convenient and buy your friends beer on Friday night. And then slowly your bank balance dwindles down until you’re on your last 200 bucks and suddenly everything changes. You learn how to make a mean pasta salad! You convince your boss there should be free coffee in the office! You notice the two free parking spots on the side street you use for free if you show up at exactly 8:15AM! You discover the dive bar around the corner with the best happy hour in town! You’re getting creative and doing new things in a way your flush-with-cash-post-bonus self never dreamed of.

The Beauty of Constraints

What do we do when there are no constraints? The most easy, obvious, boring thing possible, that’s what. You do what everyone else does because it’s easy and you can afford it. This is a recipe for marketing failure.

I’ve had big marketing budgets and trust me, it’s really hard to motivate people to try new things and be really creative when there are tantalizingly easy options available to you like – hire an agency to do everything or do that thing our competitors are doing or just spend more on customer acquisition.

Taking the money away often takes away all of the really obvious options. And that’s exactly where the magic happens. So we can’t just spend more to acquire new customers. Now what? Well, we could figure out ways to engage them to send more business our way, we could figure out ways to sell more to the customers we have, we could figure out ways to improve our customer retention. There are always a thousand things you can do with a small budget.

Big budgets make us lazy. You’ll start hearing things like: But we have the budget to just keep doing ads, why should we mess with that? We don’t own customer retention. It’s too hard to get customers to refer us and we’ve never successfully done it before. Give a marketing group a budget that’s too big and you’ll here a chorus of lame excuses.

So here’s my advice. Embrace your puny marketing budget. Use it like a weapon against the bloated, ineffective, unremarkable marketing of your competitors. Trust me, they’ll never know what hit them.

67 thoughts on “Your Puny Marketing Budget is a Weapon”

  1. April,

    This is so true, “Big budgets make us lazy”. Plus there is the pressure to spend the budget so you can request the same or more next year.

    While having a small budget can be painful, it foces you to be creative and to find ways of getting it done that aren’t out in the open for everyone to see.

    Great post!

    Josh

    1. Thanks Josh,
      Lots of strange things happen when there is too much money around but the worst is that people stop spending it like it’s scarce. I’ve been in that situation where we were pressured to spend the money just because it was there. The minute that starts to happen you know you are no longer treating the budget like something that’s precious.
      April

  2. LOL – my guess is that most marketers might agree with you but they wouldn’t say it out loud for fear the people that hand out the budgets might hear you.
    I wonder what we can do to keep that sense that the money is scarce, even when it isn’t?
    Great post and glad to see you posting a lot again – we missed you!

    1. I know, I know. I’m in a situation right now where my budget is pretty good and I wonder myself if I would have written this post if my own budget was puny.
      The fact is though that money doesn’t create great marketing opportunities. I think the best way to keep things under control is to evaluate and fund projects. The minute you start thinking about things in a broader programmatic way it’s harder to hold people accountable for results.

        1. Hi Sam,
          I’m not saying that it’s impossible to do great marketing with a large budget, only that it’s not impossible to do great things with a small one.
          April

  3. April, this rocks! The first phase of my career was spent in nonprofit marketing…now I’m marketing for small businesses and startups. Guess I’ve never really had the luxury of a big budget so I don’t know what it’s like to keep doing boring (but that doesn’t mean I don’t pine for more money).

    As you note, there’s a challenge to marketing with a small budget. It forces us to look outside the ‘normal’ for new ideas. It can be done on a massive budget, but nothing hones the senses quite like knowing you need to make a lot out of very little.

    Thanks for reminding me why I love marketing in small, scrappy companies.

  4. Wow, another great post. Reminds me of “inertia based” marketing. My last job, when I joined (as a product manager), we had a marketing review. A huge list of events we attended (booths, sponsorships, stipends for key speakers, the whole 9 yards). I questioned every one of them with the same monotone question: “Why are we doing this?”. Invariably the answer was “We have always done that show|event|venue”. Then I started measuring the effectiveness of these events.

    No surprise that the ROI was negligible (an example: one event that cost us nearly $125K annually to participate in hadn’t generated a single sale traced to it in over 4 years).

    Yep, a lot of sacred cows fell there. Did a lot of experimentation, increased the leads, and more importantly the quality of the leads, while trimming the budget significantly.

    1. Oh I think tradeshows are the worst for people saying they have to do them because they’ve always done them. It’s almost as bad as print advertising.
      Thanks for the comment Geoffrey.
      April

  5. This is absolutely spot on, April. I love it.

    10 years in startups, with pitiful budgets, but no fear. Recently consulted for a considerably larger company with what, for me, was a fat budget – and they were paralyzed from the neck up. I had to kick, and prod, and needle, and scream to get permission to move forward with anything new. Then I moved on, and they have not done one single new thing in 6 months.

    One thing for us all to think about, though. I’m not clear it’s the size of the budget – it’s the size and nature of the company. In startups you have no constraints, and you have the do-or-die charter to “achieve the impossible with inadequate resources” (my favorite definition of entrepreneurship). So you have the need and the freedom to get creative.

    aaron

  6. April, this is a great post.

    One huge advantage you have with a small marketing budget is you’re either doing the work yourself or working very closely with the vendors who are. If your competitors have huge budgets, chances are they need to use lots of vendors to do the actual work and the marketing employees end up as decision makers. You get a big gap between the people doing the work (who have the marketing expertise) and the people who make the decisions (employees who know the business).

    Large marketing departments can spiral out of control. They get bigger and so need more managers and more meetings, so they need larger budgets. Then new teams to work out how to be more efficient.

    “Less is More”

    1. That’s a really great point. I have seen vendors literally run away with a campaign because the marketing staff couldn’t manage them. It’s more common that you would think.
      April

  7. I think coming from the mantality that every dime spent could be wasted and therefor must be used very very carefully is the best way to approach it.

    It’s one thing being a pet project, but in business, sentimentality has no place. If it eventually isn’t making money, you’ve got to count your losses and toss it away. I’d hate to be one of those people who end up on Dragon’s Den with a bum business idea and $150k in debt because I thought it was a “sure thing.”

    When you don’t have money you go into survival mode and start getting creative and doing things the “big guys” arent, which helps you grow. For instance, having better customer serivce than a major corperation gives you a competative advantage. While you’re working hard, thinking, scheming and strategizing most bigger companies are just tossing money at their problems.

    1. I agree that you have to treat the cash like it’s scarce.
      The biggest problem I see at larger companies is that folks will sometimes develop a superstition about tactics that they have always done. Tradeshows are like this. Even where folks are tracking leads and sales from the shows and can prove that there is a lousy ROI they will resist cancelling them because “something might happen.” I hear all sorts of strange excuses – “our customers expect us to be there” or “we’ll be sending a message to the market that we are existing the space if we don’t show up” or “our competitors will use it against us if we aren’t there” I don’t believe any of it. But there still seems to be some sort of invisible risk associated with giving up something you have always done. I seriously don’t get it.
      Thanks for the comment.
      April

  8. Great wake up call! I particularly like the “beauty of constraints” theme. I have been guilty myself of thinking that more marketing dollars will be the cure for all my go-to-market ills. A smaller spend is a good way to really think about how exactly you’re going to reach your audience (are they really going to be at the conference you’re sponsoring?). Also, watching some of the powerful social media campaigns out there and the constant engagement of many market teams on social media is a reminder that you don’t need a ton of money to stay connected with your current and potential customers.

  9. Third world countries are also very imaginative because of their lack od resources, but that does not help them grow.
    Small budgets often reflect the valuation of the marketing efforts and department by the head of the company. It leads more often to discouragement and burnout than to great ideas. The more money, the more muscle you can flex. Even if you waste some you have more leeway to correct course and to make up for mistakes

    1. I disagree (obviously). In most of the larger organizations I have worked at marketing budget was set according to a set formula (usually based off of revenue). I’ve also worked at companies where the budget was small but the commitment to marketing was huge.
      As far as third world countries go, I’m not sure marketing budget is the problem. Not all problems (in fact very few in my opinion) can be solved by blindly throwing money at marketing.
      April

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