Most companies will be cutting overall budgets in 2009. Just published research from MarketingProfs.com shows that 30% of marketers have already made spending cuts, and 22% have made budget reallocations.

Here’s the tricky part.   What do you cut and what do you keep?  What cuts leave you with enough to generate immediate sales, but don’t dramatically harm longer-term efforts. In our experience, while a lot of discussion is held regarding budgets and “how much” to cut, not nearly as much thought process goes into a strategy of “where” cuts are made and more importantly what is left to be funded.

If companies looked at yearly budgets in context of, say 5 or 10 year objectives, then that would provide some insight into prioritizing annual budgets.   If your business expects to be around in 10 years, then cutting budgets may make sense to keep operating cash flow balanced in a poor economy.  (If you don’t expect to be around in 10 years then you have a much larger issue).  But, how do you prioritize remaining budgets?

First, think about your targets.  In a down economy, job #1 is to protect and support your most loyal customers, or guests … your zealots.   Building programs to and through this group is the surest long-term path to brand profitability – in any economy.   And, the good news?   Zealotry programs, because of their one-to-one nature, are a fraction of the cost of traditional marketing and advertising programs.   More good news?   Your best prospects (meaning new customers) can come from a well-designed zealotry program.

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