The theory sounds good. Of course, Sequoia Capital didn't offer any evidence that this is the best strategy. But it is a nice presentation with lots of graphs indicating pending doom.
All of you who run Multichannel Forensics forecasts know the real impact of cuts in marketing, don't you?
- Brands in "Retention Mode" face dire long-term growth and profit consequences by hacking marketing expense today. However, the hatchet-like approach will appear really positive in the short-term, because sales won't decrease much this year.
- Brands in "Hybrid Mode" have a lot of options for cutting marketing expense.
- Brands in "Acquisition Mode" can take a hatchet to marketing expense, knowing that because they do not retain customers at a sufficient rate, the business will bounce back quickly when the economy returns. However, the hatchet-like approach will have dire consequences on top-line sales this year and next year.
I'm confident you can build these tools yourself, if you need to. If not, I'll be happy to help.
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