Is 4–5% enough? The hidden risks of shrinking your marketing budget
WRITTEN BY: ALISON JOSHI, DIRECTOR OF JWJ DESIGN
With rising costs across the board, many UK leisure and destination businesses are tightening their belts, and one of the first places to feel the pinch is the marketing budget.
Recent trends show that businesses are now spending just 4–5% of annual revenue on marketing, a figure notably lower than the once-standard 7–10% often recommended for brands looking to grow. Understandable, given inflation and increased overheads. But what does this shift really mean for business growth and long-term brand health?
1. Shrinking spend = Shrinking visibility
One of the first things to go in a leaner budget is often brand-building activity. But in competitive industries — leisure, tourism, hospitality, and lifestyle in particular — this reduction in visibility can quickly become a problem.
If you’re not regularly showing up in front of your audience, someone else will be. Over time, this leads to:
– Decreased brand awareness
– Fewer customer touchpoints
– Reduced footfall, web traffic or enquiries
Even loyal customers need reminders, especially when consumer attention is being pulled in every direction.
2. Growth and diversification get sidelined
Many small businesses are actively looking to diversify their services or attract new customer segments — a smart move in a shifting economy. But launching something new without adequate marketing support is a bit like throwing a party and forgetting to send the invites.
With reduced budget, it becomes harder to:
– Research and target new audiences properly
– Position new offerings clearly and effectively
– Generate momentum around new campaigns
And that can lead to underperformance, not because the idea was wrong, but because no one really saw it.
3. Short-term thinking creeps in
Smaller budgets often lead to quick wins and knee-jerk solutions. The big-picture strategy takes a back seat, and instead of building long-term brand value you’re stuck reacting to slow weeks or patchy bookings.
This approach can result in:
– Inconsistent messaging
– Lower customer trust and recognition
– Less meaningful brand differentiation
This kind of marketing rarely delivers the ROI people hope for.
4. Teams (and founders!) start to burn out
Tighter budgets often mean team members wearing more hats, and possibly ones they are not trained in.
This can lead to:
– Inconsistent quality and messaging
– Missed opportunities
– Burnout and bottlenecks
A strong brand needs care and consistency, not just content for content’s sake.
So… Is spending 4–5% on marketing wrong?
Not necessarily. If that’s all that’s available, the key is to spend smart. Think strategy over scattergun, and focus on assets that work harder for longer.
– Double down on brand consistency: even low-budget marketing can be powerful if it’s recognisably you
– Prioritise high-impact channels: go where your audience already is, and do fewer things better
– Re-use your content, not everyone will have seen every social post you put out there so re-post and re-use where you can
– Build campaigns with a long shelf-life, this can mean investing more upfront but when done properly it will last longer and have more impact – thus saving you money in the long-run
Are you looking to grow or maintain brand position?
5% tends to be enough for businesses looking to maintain their current position and brand awareness. 10% (or more) is better if you’re in growth mode, launching something new, or entering a competitive space.
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As a small business ourselves we understand all to well about managing budgets – we work closely with our clients to ensure they get the most value out of the creative work we build for them so that they can utilise it across all channels.
Get in touch if you want to have a free, no obligation call around how to utilise the small budget that you do have. hello@jwjdesign.co.uk
