Making a fixed cost Impact
As part of a series of interview with the team we have been asking what lessons retail should have learnt or should be learning as we deal with the ongoing pandemic. This interview is with Retail Remedy Associate Jo Staton, a straight talking, cost saving legend.
So Jo, why bother with marketing in these Post Covid times ?
The Marketing Department within any retailer is often the highest cost P&L and the obvious target when the proverbial hits the fan. It is easy to say cut the Marketing spend in the current climate but are your competitors doing the same? How is your marketing going to stand up against them to get the customers in your stores rather than theirs? For me, it is about making it work smarter not harder, if anything now is a time to increase the marketing spend and look to state the case for customers safely selecting you.
What would you be doing now from a cost perspective?
From an operational perspective you look at all of the costs, in these Post Covid times even more so, especially the ones that are supposedly “fixed”. When I go into businesses to look at Marketing costs specifically, I often get told something similar to “we have to pay that”, Why? “because we always have”… isn’t an answer. I would look at the following:
- Identify the true fixed costs, not just what you have always paid and re-evaluate your Marketing spend including what is remaining for 2020 and for 2021 planning.
- Ask your team to reduce the budget by 10%, 30%, 50% and detail what would be sacrificed accordingly. Doing it this way serves to establish the core of the function and highlights what might be optional.
- Ensure your plan and therefore your budget are factoring in the latest customer insight, this is your best source of keeping ahead of the curve.
- Recognise the agencies that have supported you and brought new, innovative ideas throughout this significantly difficult time. Have they been a true partner, or do they just want their invoice paid?
- Ensure your contracts are fair to both parties but work for you, they can be altered and have detailed KPI’s on both sides.
So, is it just about cutting costs then?
Obviously, it is more often than not about costs, but it is also about ways of working and operational simplicity. How do you get from A to B in the smartest, most cost efficient way possible. Where are the baton passes between Marketing and the other areas of the business, is there any duplication? Have you looked for it? Critical Path management is key but often forgotten as the day job just has to be done. You have to ask yourself if every department is thinking about the broader team and how they deal with these handovers in Post Covid times. Chart the critical path out, eradicate duplication and focus on efficiency.