Beating the Fallacy of “Cheap” Marketing


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Your CEO just rejected another proposal that could increase revenue on the grounds that the marketing investment was too much. What are you to do?

I was speaking with a prospective client the other day, and he shared stories of how marketing spending was reduced annually for the past 5 years. As a result, the brand was in decline and the products more like commodities than before. Each time he brought a recommendation to drive revenue by increasing marketing investment – social media, content-based marketing, long-term lead nurturing, improved web analytics – he was told to estimate the absolute minimum amount to get started. Then management delayed for several months, and eventually agreed to even less spending, so that the marketer couldn’t even get a good read from a test, much less roll out a new initiative. When asked, his CEO bragged about the fact that the company never spent money frivolously, that they were always “cheap.”

And this behavior is not uncommon; while other companies do not call themselves cheap, I have seen them steadfastly refuse to make investments that can have a direct payoff to the company, because those investments would be greater than in the past.

Can you wonder why marketers feel more stress and burnout on the job now than ever before?

Now, to be fair, let me overtly recognize the challenges that the “new economy” has brought to businesses since 2008. The market is tougher than ever, and consumers more price conscious. No one is denying that.

But those are the exact reasons that companies must invest in new strategies that have the potential to improve results consistently over the long term. You can choose not to make those investments; however, you may then find yourself in a “race to the bottom” where companies try to out do each other in spending cuts, until there is nothing left to cut. By the way, at that point there is no business either.

Breaking the Log-Jam
To breakthrough and successfully engage your senior management, you have to play on three leverage points:

  • Their Peer Group (other executives) – there is no better way to move a CEO to action than to show him that his friends and peers are moving ahead without him.
  • The Competition – executives tend to have an obsession with the actions of their immediate competitive group. Pull up examples of work that the competition is doing, listen to their analyst calls and read articles about them, to demonstrate the advantage that they are gaining by taking up your strategies.
  • The Board – the other factor that influences executive decisions is the actions and beliefs of their bosses, the Board of the company. Identify the companies board members are affiliated with and show how they have taken the lead in these key strategies. The risk of being caught unprepared at a board meeting or by a board member offline is enough to motivate a CEO to action.

Remember not to judge your senior management too harshly; the “save your way to Heaven” approach used to work, when Marketing was more mass media and consumers came more naturally to your products. But today, such approaches no longer work. You can trim mass media and get away from it, but you cannot trim customer contact and relationship building without seeing both immediate and longer-term effects.

You can reach them through facts and data, if you bring that approach to the key stakeholders of your CEO. Combine both logic and “the heart” and you will have a winning combination.

Republished with author's permission from original post.

Mark Price
Mark Price is the managing partner and founder of LiftPoint Consulting (, a consulting firm that specializes in customer analysis and relationship marketing. He is responsible for leading client engagements, e-commerce and database marketing, and talent acquisition. Mark is also a RetailWire Brain Trust Panelist, a blogger at and a monthly contributor to the blog of the Minnesota Chapter of the American Marketing Association.


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