Sigh… I feel like all of our conversations lately are about adapting to a new normal as a result of COVID, the awful state of the job market and limitations on discretionary spending. Alas, this one will be no different.
Recently, I started thinking about how our budgets are being affected by COVID and how we need to do the proverbial “more with less” as we begin to see what the business might look like and witness an evolution of new visitation patterns. However, the truth is, many situations could lead to being asked to do more with less. How many of us reach the end of the year with a surplus? When was the last time the CFO said go and spend more money and buy more ads? Although magnified now, perhaps this is the time to start developing the good habit of effective marketing and utilizing our resources wisely.
Living my life in the world of branding and creativity, I often see these so-called “soft” fields at odds with the notion of ROI and profitability. There is always a debate as to the value of what we are doing as marketers and whether or not it is effective at attracting gamers through our doors. Our budgets are constantly under scrutiny.
The questions we should be asking ourselves is not how we do more with less, but how do we thrive on a reduced budget. None of us want our budgets cut, but when it happens, we always rise to the occasion, critically examining our plans and adjusting while still keeping our eyes on the ultimate revenue goals.
FOCUS ON SUCCESS, NOT CUTS
There are a few things we can do during these times that will not only meet short-term goals but long-term as well:
• Assemble a tiger team. I had completely forgotten about this, but when Apollo 13’s oxygen tank exploded while on the way to the moon, NASA had to figure out how to get the crew home quickly. They assembled what was referred to as a “tiger team,” made up of subject-matter experts with the unique skill sets needed at that crucial time to get the job done. You can do the same. Your team should be small and agile and comprised of resources (both internal and external) that can analyze data BC (before COVID) and during COVID—assessing business segments to understand how they have been affected as well as their pain points, review every marketing channel and tool to understand what still makes sense and then formulate a plan to move forward with a reduced budget and adjusted strategy.
• Consider cutting the dogs of marketing. It is easy to cut the most significant expenses first, but that is not always the best way to save resources. Each promotion or giveaway requires some level of staffing and promotion and delivers a unique return. Use a four-quadrant review of all your programs. Rate them along two axes—the first axis representing effort or utilization of resources, and the other axis representing your return. Allow yourself to focus on the programs that can get you the biggest bang for your now reduced buck.
• Review your reinvestment and mail programs. The layering of reinvestment within marketing programs has a way of sneaking up on you. When you review programs individually, layering can hide behind other reports. It is always good practice to review visits and how many offers, points and other perks are being used. How much are you investing per any one visit?
• Reevaluate your metrics. There is nothing more frustrating to a marketer than to think they pulled off a successful program, only to find out other executive team members were less than impressed. Gray areas like this exist because of the metrics we use to measure success. One size does not fit all. Review all of the programs you use and determine the appropriate metric for evaluation.
It is very similar to a conversation we had during a Casino Advertising Masterclass session. The purpose of a billboard is never going to be the same as that of a television spot. Why would we measure them by the same ruler? Giveaways serve one purpose. Hosted events serve another, and although they both have revenue goals, comparing them is like comparing apples to oranges. Once you have reevaluated and reset key performance metrics, the executive team must be in agreement.
• Experiment with control. The test and control approach has been a hallmark of how we adjust our reinvestment programs; the same process must be applied to all other marketing tools. Introducing new opportunities one at a time allows you see the impact level of the new element. Making too many changes at the same time just creates data clutter.
In addition, program reductions should be made surgically and with care. Significant wholesale cuts tend to explode into a cloud of guest complaints and team member dissatisfaction.
• Reorganize your resources. Start by keeping your core competencies and generalists in house. Seek to outsource assistance for specific expertise and to provide possible staffing flexibility. I realize that is an expense, but the value of having additional, external points of view and additions to the team will outweigh the expense.
• Do not ignore team members. Indeed, team members are often the biggest marketing engine you have—the experiences they create each day and the social networks they maintain are invaluable. The relationships they are forming with guests are more important than ever.
• Engage with your partners. You already have relationships with a number of vendors and community businesses that can be helpful to you either by helping spread your message or uncovering opportunities. According to the recent High Growth Survey, approximately 33 percent of high-growth companies ranked partnership marketing as “most impactful.” Additionally, you should be more present than ever in the community.
Keep in mind there are some signals you should be looking for when taking any of these steps. Know where your point of diminishing return is for any adjustments you make, and continuously monitor programs. If you wait too long, you may not be able to reverse course or shift quickly enough.
BE THE ROI WHISPERER
Marketers continually have to prove ROI, but we know it is not always an easy task. Advertising is a perfect example. We know we need it for awareness and branding, but unless we can tie it to revenue, it is hard to defend. As budgets tighten, it gets even more stressful. As marketers, we have to consider what is called the long and the short of marketing ROI. When we try to measure ROI too soon, we can sell our programs short. Given the current environment, ROI could very well look completely different than it did a year ago—even six months ago—forcing us to adopt new views and measurements.
Now is not the time to make broad marketing cuts. It reduces acquisition and, in some cases, could disenfranchise existing, loyal guests. Smart marketing will be the best investment you will make. Cost-cutting, when needed, is reasonable, but don’t forget you have to stay in people’s consideration even while they cannot visit—so that they will, when they can.
A thoughtful approach to cuts and then to utilization can make you the marketing tiger.