{"id":190095,"date":"2025-04-18T03:28:06","date_gmt":"2025-04-18T03:28:06","guid":{"rendered":"https:\/\/peraltafinancing.com\/analytics\/kevin-hillstrom-minethatdata-cutting-the-marketing-budget\/"},"modified":"2025-04-18T03:28:06","modified_gmt":"2025-04-18T03:28:06","slug":"kevin-hillstrom-minethatdata-cutting-the-marketing-budget","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=190095","title":{"rendered":"Kevin Hillstrom: MineThatData: Cutting The Marketing Budget"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div id=\"post-body-8736756478102123254\" itemprop=\"description articleBody\">\n<p><span style=\"font-family: arial;\">In my pricing \/ forecasting projects ($4,900 &#8230; kevinh@minethatdata.com) I&#8217;m typically asked a common question.<\/span><\/p>\n<div style=\"text-align: justify;\">\n<ul>\n<li><span style=\"font-family: arial;\">When we&#8217;re facing tariffs or economic headwinds, it makes good sense to conserve money and not spend as much money on marketing activities, correct?<\/span><\/li>\n<\/ul>\n<p><span style=\"font-family: arial;\">Well, this is the kind of question that made sense back in 1995, when we didn&#8217;t have good tools to make decisions. In 2025, we have tools.<\/span><\/p>\n<p><span style=\"font-family: arial;\">Let&#8217;s say we simply pass the increase in cost of goods along to the customer. That scenario didn&#8217;t look spectacular.<\/span><\/p>\n<div>\n<div class=\"separator\" style=\"clear: both; text-align: center;\"><a href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiw5wkYYWUmtOozO2rP8hVaQ1ofLSl4WOrUfYI05j3mKrZkvOu9aKqwRRRYvLLDPmNOZxMphJi4IQZ87UYxhszs4WxgELc74EU3U63AHOXYp3EQtmqKuXWVdn1pKhUxguMtuCXQ1pzGsUhX-FzjJvNr2DphMw2PSN2uI-ttmxJJtzAT9yv7A5s6Fw\/s1280\/mtd_20250412d.jpg\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"><img loading=\"lazy\" decoding=\"async\" border=\"0\" data-original-height=\"720\" data-original-width=\"1280\" height=\"225\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiw5wkYYWUmtOozO2rP8hVaQ1ofLSl4WOrUfYI05j3mKrZkvOu9aKqwRRRYvLLDPmNOZxMphJi4IQZ87UYxhszs4WxgELc74EU3U63AHOXYp3EQtmqKuXWVdn1pKhUxguMtuCXQ1pzGsUhX-FzjJvNr2DphMw2PSN2uI-ttmxJJtzAT9yv7A5s6Fw\/w400-h225\/mtd_20250412d.jpg\" width=\"400\"\/><\/a><\/div>\n<p><span style=\"font-family: arial;\">Demand\/Sales don&#8217;t look bad, but profit looks bad and the customer file contracts by about 2%. If your CFO is smart, she&#8217;ll have you evaluate every marketing dollar to identify waste. If your CFO is not smart, he&#8217;ll tell you to cut the digital budget by 30% &#8230; just some dumb arbitrary number.<\/span><\/div>\n<p><span style=\"font-family: arial;\">Well, we can simulate the 30% drop in the digital marketing budget. What happens?<\/span><\/p>\n<div>\n<div class=\"separator\" style=\"clear: both; text-align: center;\"><a href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjmvNGPHZ0y_FYB7uPq99O0AXcSbUlMvnvea7VHkgedaaSsDoaOiV11s1P3ZqVjoQcnc_QHJ7MAhm54vIklca8BkWwdT4jsI20rMBMH-evtGUTytQQUnqOnGoVxnrvcjWdXjLVV8OskPxt1s80Xrm1cwjNnJAOBbsP8L5d0rc9pC4ql361YRm09rQ\/s1280\/mtd_20250412f.jpg\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"><img loading=\"lazy\" decoding=\"async\" border=\"0\" data-original-height=\"720\" data-original-width=\"1280\" height=\"225\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjmvNGPHZ0y_FYB7uPq99O0AXcSbUlMvnvea7VHkgedaaSsDoaOiV11s1P3ZqVjoQcnc_QHJ7MAhm54vIklca8BkWwdT4jsI20rMBMH-evtGUTytQQUnqOnGoVxnrvcjWdXjLVV8OskPxt1s80Xrm1cwjNnJAOBbsP8L5d0rc9pC4ql361YRm09rQ\/w400-h225\/mtd_20250412f.jpg\" width=\"400\"\/><\/a><\/div>\n<p><span style=\"font-family: arial;\"><br \/><\/span><\/div>\n<p><span style=\"font-family: arial;\">All sorts of moving parts here.<\/span><\/p>\n<div>\n<ul>\n<li><span style=\"font-family: arial;\">You spend $1.5 million less on digital marketing.<\/span><\/li>\n<li><span style=\"font-family: arial;\">You generate $1.7 less in demand\/sales.<\/span><\/li>\n<li><span style=\"font-family: arial;\">Profit improves, and is now just 10% less than the year prior.<\/span><\/li>\n<\/ul>\n<\/div>\n<p><span style=\"font-family: arial;\">You likely noticed the problem, right?<\/span><\/p>\n<div>\n<ul>\n<li><span style=\"font-family: arial;\">All of your good customer segments contract by about 4%.<\/span><\/li>\n<li><span style=\"font-family: arial;\">New buyers contract by 6% &#8230; those digital dollars align with new customers, don&#8217;t they?<\/span><\/li>\n<\/ul>\n<\/div>\n<p><span style=\"font-family: arial;\">Remember, these are simulated\/modeled results &#8230; we don&#8217;t know that this is what will happen. We do have prior results that the simulation is rooted in.<\/span><\/p>\n<p><span style=\"font-family: arial;\">What is the right answer?<\/span><\/p>\n<p><span style=\"font-family: arial;\">There is no right answer. There are hundreds of possibilities, all of them are bad, the more you eat the cost of goods impact the worse profit looks &#8230; the more you try to mitigate short term profit pain you pay for it in the long-term.<\/span><\/p>\n<p><span style=\"font-family: arial;\">But at least you have choices, right? That&#8217;s what the pricing \/ forecasting simulation does for you. And I only charge $4,900 for it. Seems like a reasonable investment if you are going to be put in a spot where you are forced to pass along cost of goods increases to the customer.<\/span><\/p>\n<\/div>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>In my pricing \/ forecasting projects ($4,900 &#8230; kevinh@minethatdata.com) I&#8217;m typically asked a common question. When we&#8217;re facing tariffs or economic headwinds, it makes good sense to conserve money and not spend as much money on marketing activities, correct? Well, this is the kind of question that made sense back in 1995, when we didn&#8217;t [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":189142,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12033],"tags":[4995,3666,13773,13772,8402,13774],"dealstore":[],"offerexpiration":[],"class_list":["post-190095","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analytics","tag-budget","tag-cutting","tag-hillstrom","tag-kevin","tag-marketing","tag-minethatdata"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Kevin Hillstrom: MineThatData: Cutting The Marketing Budget - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=190095\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Kevin Hillstrom: MineThatData: Cutting The Marketing Budget - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"In my pricing \/ forecasting projects ($4,900 &#8230; kevinh@minethatdata.com) I&#8217;m typically asked a common question. 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