Have you struggled with what do to with your money for your business in a recession? A lot of us do, and one of the first things that is cut is your Marketing budget. But why? It's one of the most needed aspects of your company.
I breakdown in this episode why this is not the best idea and how it can hurt you. I also, explain that bringing these services in house at this time is going to cost you more.
This topic is a little off our normal direction, but with what is happening in the US today, it's the perfect time to get this out to you.
Have you struggled with what do to with your money for your business in a recession? A lot of us do, and one of the first things that is cut is your Marketing budget. But why? It's one of the most needed aspects of your company.
I breakdown in this episode why this is not the best idea and how it can hurt you. I also, explain that bringing these services in house at this time is going to cost you more.
This topic is a little off our normal direction, but with what is happening in the US today, it's the perfect time to get this out to you.
[00:00:00] Welcome back, everybody, to the GSD podcast. I'm your host, The Wizard of Iz, and I wanted to do a different episode today. I actually have a few episodes that I wanted to get through with you guys. I've taken a little bit of a break. It's quite busy right now at the holidays, just trying to wrap up work and get ready.
[00:00:18] I tried to take the last couple of weeks off of the year every year to so I can enjoy that family and friends try to travel as possible. So I've been a little bit behind on the episodes, but this one, this one, I kind of wanted to get out to you guys a little different than what I planned on. And in this episode, I kind of want to talk about, marketing through a recession.
[00:00:39] Now, regardless what you believe what's going on in the country and economics and stuff like that, you know, there's definitely layoffs that's been happening and we have some family friends who have been laid off from their jobs. They are jobless right now. You know, they're looking to try to get work and it used to be, I think it was.
[00:00:58] Two jobs for everyone [00:01:00] applying recently. And now it's down to one, maybe one and a half jobs per people applying. It's not there like it used to be. And it's a little bit harder and it's a bit of a struggle for some people to land jobs.
[00:01:10] So with that being said is people are losing their jobs. People are struggling to make ends meet credit card debt is through the freaking roof. And on top of that, people are paying school loans again, that they didn't always expect to. So this isn't an economic podcast. I don't want to get there, but what I'm.
[00:01:27] Bringing up is very important because what I've noticed is being in the business of marketing. And I don't know if I've said this on the podcast before, but I did not plan to get into marketing. I fell into marketing. I got really good at it with doing Google ads and, and, and understanding people's brand and brand message and understanding how to help them make a unique selling proposition and how to stand out in a extremely crowded market.
[00:01:51] And I like it. I really do. And I think I've. Really enjoyed what I have done, but it is a struggle at times. And the reason this podcast [00:02:00] episode is kind of the perfect timing for which, as I'm saying, it's called marketing in a recession is because I've been through problems and issues where people, businesses.
[00:02:12] The first thing they dump when things get tough, whether it is a recession or whether things are shutting down, like during COVID, whether money is tight, they get rid of marketing first and it literally baffles my brain. So if you're a business owner out there and you're wondering where to put your money, when things get.
[00:02:32] If you get rid of marketing, how are you going to bring in any new business? It just, it doesn't compute with me. Oh, we're going to get rid of marketing to save money. All right, cool. So, uh, how are you guys going to bring a new business? No, we didn't think of that. I know you didn't think of that because you're thinking, how can I cut costs without getting rid of employees?
[00:02:55] And I get it. You're going to try to save your employees first. So people think, okay, let's cut [00:03:00] external costs. Marketing is usually an external cost. It's not usually an internal cost. So we get rid of that first. It saves some money for employees.
[00:03:07] Get that. I get you want to save employees. I, you know, I have a different sense of being a business owner. If I'm a business owner, I might cut my cost first. I might cut what I make first. Or if I have money to sustain, I take my money and stop pulling money from myself and put it to my employees and marketing to keep the business afloat.
[00:03:29] If I really struggled, then I'll cut marketing too, to give my employees a job. But if you're not bringing a new business, why do you cut that first? And I say that for anyone listening who runs a business, instead of cutting it, revamp your marketing, look at your marketing and see what works, maybe cut out the extra stuff you don't need right now and work on what will give you returns early on.
[00:03:53] Maybe it's a matter of not cutting your services, but maybe it's just cutting back your ad spend, you know, maybe cutting back how [00:04:00] many platforms you're on. Marketing is a long term game guys. So when you Cut all your marketing, you're literally pausing the traction you're getting and people don't understand that.
[00:04:10] And the only way to get them to understand that is to look at the numbers to show the traction that you get by constantly marketing. Now, I know what some of you are probably thinking. Oh, Mark, Mark's just venting because maybe somebody let him go and marketing and things like that. No, no one has let me go right now.
[00:04:27] I could see it coming because I've been through this before, but nobody has. And I stress the importance of why you continue with marketing. So when you're in a recession, and I'm saying this to all of you out there that run some sort of business. When a recession comes up, you should have what's called landing strip money.
[00:04:43] It's something I learned from a mastermind group I'm in. I love the term landing strip money, which means you have money saved up in your account so you can land your damn plane. So when you overshoot for something, your landing strip has extended out so you can land safely. So what [00:05:00] that means is if money gets super tight and you're in the whole two, three, four months, you have enough money backed up to still pay your bills.
[00:05:07] So you have the chance to do something to counteract what's happening. And I've realized a lot of people run their business like they run their lives. I talked about credit card debt being the highest it's ever been. People are living off of credit cards. I don't know if you guys know this, but, uh, the way a lot of people run their business is no different than the way they run their life.
[00:05:26] So a lot of these businesses are sitting on major credit card debt as well. That's never going to sustain your business. That's why I wanted to bring this up. That's why I thought this was important to bring up right now heading into the new year because there's a lot of talks about different things happening in 2024, not only with.
[00:05:41] Interest rates changing, possibly deflation. You know, maybe your services, you're going to have to cut your costs on your services, maybe housing, higher unemployment, blah, blah, blah, blah. I hate talking about that crap, but it is something to be aware. I'm aware of it. Cause my business, but outside of business, personal life, I just focus on my family and make sure that we can sustain.
[00:05:59] [00:06:00] And that's all I care about because this can drive you nuts and you need to get away from it once in a while, but when you're marketing. And for a recession, you don't stop. You find a way to keep marketing because once you stop, you just start to lose your momentum. I've had two clients in 12 years that are the only two that ever stopped marketing, either during a recession or during COVID time when things slow down, and both of those now are closed.
[00:06:27] Both of those businesses are out of business. You know, is it a coincidence? Could be, is it a trend? More likely, is it the way they per zoom and operate their business and look at life? Maybe I don't know all their personal life, so I can't answer that, but it's a very big possibility. So when I talk to people.
[00:06:51] keep marketing through a recession. Just figure out how you can make it work on all ends. And if you're just hearing this now and you're doing good in your business, stop [00:07:00] spending every ounce of money you have so you have a ton of expenses. I also run into people are like, Oh man, you know, the end of the year is coming up.
[00:07:07] I'm going to buy a bunch of stuff so I can cut my taxable income. That's actually not a bad idea if you have enough money in reserve, but don't do that. To piss away your reserve, make sure you have a reserve. Your business should be no different than your personal life. You should have three to six months worth of money to cover expenses.
[00:07:26] I say six months. Three months, I don't always think is enough time to turn things around, but I would always have that. And when you cut your marketing, you take that much longer to get your marketing back up and running again. You let your other competitors take over and their ads optimize over yours.
[00:07:42] You lose traction. So unless you have this amazing internal referral system that like you're just racking it in with business, you're going to lose any possibility. Of business coming in and I know some people go into, you know, survival mode where they're like, we just got to sustain the [00:08:00] customers we have, you know, maybe they're, I don't know, reoccurring monthly customers and it's enough.
[00:08:06] I get it. Some people do that and wait it out, but sometimes if you have the money, this is a time to grow because a lot of people are going to cut back. So don't cut your marketing. Keep it going. If you had to do anything, scale back, but if you can afford it, push forward, gather data, see what's working, see if you can bring people in because you know what?
[00:08:25] There's always some people that have money that are ready to do something. And it's the people still marketing that are going to make it work. The second part of this I want to talk about is Hiring marketing outside of an internal system. I've, I've encountered this a lot. You know, I run my own business and I'm also a contractor for other agencies out there where I help them with marketing.
[00:08:46] And I've met people who are like, I'm just going to bring marketing internally. I'm going to hire somebody to bring somebody on. And I'm like, great. What are you going to have them do? Oh, everything. Well, for those of you who have listened to this podcast, I've [00:09:00] been listening for a while. You will know from one of my earlier episodes that you do not need to market on every platform.
[00:09:06] It's the biggest misconception out there. If you got to. Ton of money that you just want to blow, then yes, put yourself in every platform, run ads, super saturate the area and just overly consume and blow out your competition. Most businesses can't do that. So what do you do? The number one rule, what is like, who are your people?
[00:09:24] What are your demographics? If you don't know that you got a problem with your business. But you've got to understand your demographics and please don't, please don't ever tell me it's everybody. It's not everybody and it's never going to be everybody, especially when you're running ads because the more you open it up, the more you're going to be just dumping it out of pocket and the less results you're going to get.
[00:09:45] Know your demographics. Know where they are in market there. That's all you got to do. That's really all you got to do. And if you have a good, unique selling proposition, which we've talked about in early episode two, you're going to bring people in no matter what. So when you, when you talk about [00:10:00] marketing internally, like bringing on a team, I always tell people, I was like, okay, listen, this is why I hear that.
[00:10:04] I should have prefaced this by, I always hear some companies being like, we're going to hire someone to do it internally because we don't want to pay. The cost. And I'm like, okay, well, what's your cost? I've literally heard companies say, well, it's 500 a month to run AdWords and, or sorry, Google ads. And then it's our ad spend too.
[00:10:23] That's like so much money. Like I'd rather hire someone internally. Okay, I, I could tell you guys already that that's an extremely discounted rate that is actually not bad, but you need to stop including ad spend as the cost that you're paying the marketing company. The marketing company is not pocketing your ad spend.
[00:10:43] That's going to the platform that's running the ads. So you got to take that out of the equation. You're only paying 500 a month. So you're going to hire someone internally. Well, number one, if you want to be good, you want experts in what they do. I'm sure you can go out and find a [00:11:00] dime a dozen where someone's like, I can run Google ads, Facebook ads, LinkedIn ads, Instagram ads, YouTube ads, Tik TOK ads, Snapchat ads, Twitter ads.
[00:11:08] You can, you can find that all day. Can you find an expert who really knows what they're doing in all those in one job? Or are you going to find someone average who at the best will be intermediate at that? Maybe that's all you want. Maybe you're just average. Maybe that's all you want. If you do, go for it.
[00:11:28] I'm going to tell you, you're probably dropping at least 20 to 25 an hour to have that person on your staff with everything that they're going to have to do. And if you really want them good, they need to keep up with the latest trends. So let's just, let's go on the low end. Let's say 20 an hour. So if you're going to hire someone at 20 an hour, and we look at the average of like four and a half weeks of a month, you're going to pay this person 3, 600 to be on your staff plus paid time off.
[00:11:55] Most likely medical and dental benefits. Plus they're paying [00:12:00] taxes. And if you're a business owner and you guys do payroll, you understand that you also pay part of their taxes. So 3, 600. It's a lot more than paying someone 500 a month because you're still going to have to pay ad spend. Don't warp your mind on what you see.
[00:12:15] I actually have a client, not going to say who they are, but I have a client that I do consulting with them. I run Google ads with them. They've been with me for a while. I also help with website maintenance and landing page. And I do give them a really great deal. Great deal. And. They spend about 1, 200 a month in ad spend.
[00:12:37] We were talking once and they're like, Oh, you know, I'm not going to give my costs, but they're like, Oh, well, you know, we're dishing out blah, blah, blah, all together. And I said, no, you're not. And they're like, what do you mean? I was like, you only pay me X amount. The other 1200 is your ad spend. That money doesn't come to me.
[00:12:58] You actually pay that directly to Google. [00:13:00] You only pay me. X amount. Oh, I didn't think about that. Well, no, you don't think about that. And that's fine because all of it is marketing. It all goes to marketing, but keep in mind, you're not paying me close to 2, 000 for all of this stuff. You're paying 1200 to Google, and then you're paying me for management.
[00:13:19] It's like my invoices are just for your management. You guys pay Google directly. So yes, when you're budgeting, you're looking at a marketing thing, but I'm not. That amount of money and people forget that they see a total amount and think I'm going to hire internally and then they realize it's really, you know, three to four grand to bring someone in internally.
[00:13:37] Plus your ad spend. Don't make this mistake of bringing someone in internally. If you can actually hire a marketing company and they're charging you, even if it's like one or two grand a month to run multiple services as well as. You have your ad spend on top of that. It's going to save you so much more money.
[00:13:56] And the agencies are going to be more experts in the fields than bringing [00:14:00] someone in internally. Don't make that mistake. I've seen a couple of people make that mistake and it, it, it doesn't work as well unless you're. A large company who can hire a team of five to 10 and you get experts in each one, and you can probably pay 20, 000 a month in all of these salaries, then go for it.
[00:14:19] But if you can do that, then yes, you don't need a net agency, build it internally, but most small to medium sized businesses. Yeah, you might be able to hire Joe Schmo who wants to run social media for you. But guys, social media is not necessarily a high ROI in the beginning. Social media strategy is a long term marketing plan that you eventually see your ROI from.
[00:14:44] But running ads is a quick ROI and it builds brand awareness and it builds website traffic that will then lead to things like blogs, social media to then help you grow even more and [00:15:00] grow your SEO for your website. I'm just spitballing info that's very You know, informative and relevant for everybody out there, whether you're working for yourself or whether you have a small business, but don't make the mistake of looking at something from a marketing company and be like, Oh, that's a lot.
[00:15:14] Or even from someone like me and be like, I'm going to hire him internally because you're going to miss out. And when a recession hits, the last thing you should do is cut all ads. Scale back your ad spend. If you have to work with the company or the person and be like, Hey, short term for the next, you know, three months, can we maybe cut back on the services and ad spends on paying less and less than services, but I'll keep you and we'll reevaluate in three months with maybe an end goal to get back to where you were.
[00:15:42] I know I would work with people on that because I know the worst thing to do is stop your marketing because the two I've seen stop marketing closed and went out of business. So on that note, keep marketing in a recession, hire that marketing people, keep that marketing team, person, agency on half.
[00:15:59] [00:16:00] Don't make the mistake of looking at your ad spend and think that's where you're paying an agency and think you can bring someone on internally because having one person doing it. All is not gonna get you to where you want. It's not. That's not an expertise. One person is not going to be an expert in all of these.
[00:16:16] You want to be smart about it. Marketing should just, should be just as important for your business as it is customer service, as it is your sales funnel and experience. And if you're e commerce as it is your order slash shipping delivery service. It's just as important. So thanks for listening in.
[00:16:35] It is also that time of year where I like to take my mental brain break from work and everything else and literally just relax and not think work, not do work. I did an episode on this last year. It it's so important. I can't even stress it to take that break, mental break, connect with family, connect with friends, get away from the hustle and bustle.
[00:16:56] And it. It is okay to sit on your couch and watch movies [00:17:00] for freaking 10 hours straight. If that makes you happy, go do it. Enjoy your new year's. I got some great episodes coming up for you in the new year. If you love what you hear, please leave a review, share this on social media, connect with me on Instagram.
[00:17:12] I'm on Instagram wizard of is I'm also on tick tock wizard of is I don't post as much right now. I will more in the future, but you can connect with me there. There's certain things you want to hear me talk about. Let me know I'm going to be starting a group in the near future for content like this And i'm just looking to bring more information to all of you out there and to help you more So take care.
[00:17:35] Thanks for tuning in