Save Costs by Cutting the Marketing Budget

We live in tough economic times. There are a lot of professionals looking for jobs and for those of us who are employed or underemployed; we have to constantly justify the need for our positions.

I am certain, many readers who are contractors or entrepreneurs have to constantly prove they are relevant to the company bottom line. It is not uncommon to be part of meetings or discussions where the relevance of your current role/job is being questioned. I have participated in such discussions and I know people who have had similar experiences.

Cost cutting becomes the number one priority for companies during tough economic times. Often, the marketing department is the first department to get hit with a budget cut. Many companies like to assign one marketing employee multiple responsibilities (refer to my Marketing Swiss Army Knife article). The question arises (among small, medium and large enterprises) on whether the branding/marketing department is worth the dollars. The answer to this question is a resounding yes.

We all witnessed the PR crisis experienced by United Airlines when multiple videos of an airline passenger being dragged out of his seat surfaced on the internet and became widely circulated on social media. Initially, United Airlines CEO, Oscar Munoz made a public statement showing a lack of empathy:

“I apologize for having to re-accommodate these customers. Our team is moving with a sense of urgency to work with the authorities and conduct our own detailed review of what happened. We are also reaching out to this passenger to talk directly to him and further address and resolve this situation.”

This statement, that seemed like it was approved by the legal department, seemed totally out of touch with the customer experience. This approach caused the incident to spiral out of control and caused a major PR nightmare. The incident happened on April 9th and the passenger (Dr. Dao) and United Airlines finally reached an amicable settlement on April 27th.

If we are looking from a financial standpoint, were there losses? Absolutely! United Airlines stock prices dipped days into the incident. The prices fluctuated based on the way United Airlines responded to the incident. Stock prices have recovered since, and United Airlines and other airline companies are changing their policies regarding overbooking and reimbursement. If they consider legal fees incurred for the settlement and loss of customer confidence, the damages are long-term.

Some feel the United CEO lost a planned promotion due to this uproar. If United had taken a more thoughtful approach from a PR standpoint, could they have averted this nightmare? Absolutely! (Refer to my article about PR department)!

This almost seemed like another BP oil spill incident. In this case, the situation spiraled out of control due to bad PR. This incident brought attention some of the unfair airline policies, which caused United Airlines to hurriedly change its policy. What does this prove? Now more than ever, it is important for companies to have a clear understanding of what their vision and mission are, and also reinforce those ideals before the public. Companies are being constantly watched, so a misstep like this can cost the company millions of dollars.

Policy is important/ profits are important, but brand image is just as important. Brand image is always listed as an intangible asset on the balance sheet, however this incident mixed with #BoycottUnited  #munozmustgo  #BoycottUnitedAirlines hashtags, forced a behemoth company like United to rethink their approach.

So, going back to my original point regarding cost cutting and Marcom department; next time you are in a meeting wherein your company is questioning the relevance of the marketing department, use this incident as a case study and quantify the losses and the amount of damage control expenses incurred by the company. You would have successfully made your case to save your marketing team.

Rinki Mukherjee

Rinki Mukherjee

I am a marketing professional with more than 10 years’ experience. I currently work as a Design QC Specialist contractor with Chevron Creative Studio. I have worked in industries such as non-profit, healthcare, oil and gas, real estate, technology, education and consumer goods.

I recently earned my MBA from the University of Houston, BAUER School of Business with a focus in Marketing Analysis. Prior to that, I earned an Associates in Graphic Design from the Art Institute of Houston and Masters in English Literature from Gujarat University, Ahmedabad, India.

I was born and raised in India but now consider Houston my home. I am Membership Officer with Prospanica-Houston chapter and Director of Special Events-Marketing with American Marketing Association-Houston chapter.

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