According to recent research by analyst house Gartner, Inc., many marketing leaders focus on cost optimization as a short-term variable cost. However, to efficiently serve your organization, cost optimization demands a mix of actions and strategies. It should be an expansive, always-on effort that has both an immediate impact on business goals, as well as a long-term impact. In order to help business leaders manage their cost optimization strategies, Gartner has come up with five different cost optimization tactics.
“Over the last few years, Gartner’s CMO Spend Survey has shown marketing budgets remain stubbornly flat — while CMO accountability continues to rise with a broader scope of activity than ever before,” said Ewan McIntyre, Vice President Analyst for Gartner Marketing. “However, we’ve also found that marketing leaders lack the fiscal prowess to build a strong link between marketing budgets and the business results they deliver, creating significant cost optimization challenges for the function.”
Firstly, organizations need to make sure that they’re covering every possible aspect of marketing operations while planning their budget. Consider seven “focuses”: eliminate, simplify, utilize, standardize, centralize, automate, and renegotiate different costs. Next, it’s important to identify any inefficiencies or stumbling blocks within your marketing team and existing strategies. In order to drive operational excellence, CMO’s must work to identify sustainable savings.
Organizations must drive cost optimization across all campaigns and strategies. Marketing leaders should take a structured approach that focuses on simple efficiency metrics, and ultimately improve media investments. Marketing technology is important, but it must be used in a productive manner. Otherwise it becomes redundant and doesn’t meet performance expectations. Marketing leaders should survey key users and pursue training and education across different types of martech software and users. Finally, assessing marketing analytics technology is critical to ensure that costs are being optimized. Marketing leaders should evaluate the impact their organizational style has on the effectiveness of their analytics.
“In order to drive business performance while reigning in costs, marketing leaders must establish cost optimization programs that uphold marketing’s strategic objectives, account for constraints, and identify the courses of action that balance the complex and competing forces within marketing’s operational purview,” said McIntyre.
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