Spring 2009/ No. 79
Managing the Budget in Uncertain Times
Times are certainly interesting these days! One of the most common questions we get asked is what is going to happen to voluntary sales considering the economic downturn. We’re doing a number of things to stay on top of the answer to this question, but the bottom line is that we probably won’t know for some time. One thing we do know, however, is that many of those in our business are feeling the pinch in the form of reduced budgets. In fact, 71 percent of the respondents in a recent Eastbridge Frontline Report survey said they have experienced a budget reduction due to the economy.
New positions appear to be most impacted so far in terms of budget reductions. Four in ten respondents in the survey have seen new sales and non-sales positions suspended or postponed due to pressures from the current economic situation.
New product development is another area that has been impacted. Again, 40 percent of the respondents said their company has delayed/postponed new product introductions. But, only a few have cancelled their product plans.
In terms of the level of reductions in specific areas, travel seems to be the hardest hit. Over three-quarters (79 percent) of respondents have had reductions in their travel budget with travel for industry meetings and visits with field staff seeing the largest decreases (over 20 percent).
Interestingly, the advertising budgets have not been impacted as much as travel. About 45 percent of respondents said their advertising budget has been cut, but the level of reduction tended to be under 20 percent. This is good news for those who believe that now is the time to expand marketing and advertising (see article Economic Lessons in this issue).
The fact that about half of the companies said their recruiting budgets have not been cut is also good news. Among those who have seen recruiting reductions, the majority were under 20 percent.
Look for more quick surveys (Frontline Reports) from Eastbridge on this topic and others as the year progresses. And be sure to participate in the surveys—it’s the only way to get copies of the findings.
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