Cost cutting does not have to come at the expense of future growth. Experts in the field share practical ways to reduce spending while protecting quality, customer trust, and revenue. Learn which costs to pause, which investments to protect, and how to recover quickly when demand returns.
- Anchor Media Decisions in Profit Measurement
- Pause Weak Channels, Defend Data Infrastructure
- Fund Retention Work Closest to Revenue
- Judge Reductions by Recovery Cost
- Keep Compounding Research, Drop Speed Tools
- Favor Repeat Purchases Over New Reach
- End Commitments That No Longer Fit
- Maintain Quality Checks That Serve Buyers
- Match Short-Term Cuts to Short-Term Shocks
- Automate Support Tasks, Shield Prospecting
- Favor Quick Restarts Over Hard-Won Expertise
- Invest in Distinctive Capabilities, Reject Generic Spend
- Align Resources With Strategic Strengths
- Delay Major Outlays Until Demand Proves Need
- Sort Expenses by Returns and Payback
- Remove Hidden Overhead, Safeguard Client Trust
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Anchor Media Decisions in Profit Measurement
My rule is to cut whatever I can switch back on inside a week and protect whatever takes a quarter to rebuild, which in paid media means demand capture can be trimmed while measurement, conversion value data and audience assets cannot. The trap is that the report most teams use to make that call is blind to value in the first place: in one ecommerce account I audit, 90.9% of half year spend sat on bid strategies that count conversions rather than what they are worth, 85.9% on maximize conversions and 5.0% on target cost per action, while the same account was passing Google roughly £26M of conversion value a year. Rank campaigns on that report and cut from the bottom, and you remove the expensive lines carrying the margin while keeping the cheap ones carrying the volume, so spend drops and profit drops faster. So before a single campaign is paused I move the deciding metric onto value, which takes days rather than months, and only then draw the line. The counterintuitive part is that the first thing to protect in a budget cut is not a campaign at all, it is the measurement that tells you which campaign deserves to survive, and that is precisely the line item that looks like overhead when money gets tight.
Dr. Igor Ivitskiy PhD, Founder, Doctor Ads
Pause Weak Channels, Defend Data Infrastructure
Our decision rule is to protect anything that compounds and cut anything that’s linear. Attribution infrastructure, clean CRM data, tracking, the systems that make every future dollar spent more effective, compounds in value over time, cutting it saves money immediately but makes every subsequent decision worse. Ad spend on channels that are already showing diminishing returns is linear, cutting it doesn’t damage anything structural, it just means less immediate output, which is a far easier cut to reverse later.
Practically, that means when a client cuts budget unexpectedly, we don’t cut evenly across the board, which is the instinct a lot of teams default to. We look first at which channels are producing pipeline efficiently and protect those, then cut the channels already showing rising cost per qualified lead or declining returns, even if those channels still technically produce some volume. We also never cut the analysis and monitoring work itself, since that’s precisely the thing that tells you where the next cut should come from, and it’s cheap relative to media spend but easy to deprioritize under pressure.
One example, a client needed to cut spend significantly mid-quarter. Instead of trimming every channel by the same percentage, we fully paused two underperforming channels and kept full budget on the two channels with the strongest cost per qualified lead, along with keeping our attribution monitoring fully intact. Overall spend dropped as required, but pipeline volume dropped by a much smaller margin than the budget cut itself, because the cuts landed on the channels that were producing the least per dollar, not evenly across everything.
Ankita Pathak, Founder, OneMetrik
Fund Retention Work Closest to Revenue
When budgets get tight, it’s helpful to distinguish activity from output. Output is a lot harder to define and quantify. If a budget item isn’t directly making money, saving money or keeping customers from leaving, cut it first. Once the budget items have passed muster, I’ll prioritize them by closeness to revenue.
My recent example is cutting agency spend while retaining one senior developer to continue to work on our number one retention product. Protecting this position protected 40% of our retention revenue during a time of decreased revenue. This way you can fully fund your number one initiative. This may seem unfair, but the alternative is far worse.
Jason Long, Founder & CEO, SupportMy.Website
Judge Reductions by Recovery Cost
We stopped ranking cuts by size and started ranking them by restart cost. The question isn’t what’s expensive. It’s what it would cost to have this back in six months.
Some spend switches off and on cleanly. Paid media, contract capacity, tools on monthly terms. You lose the output while it’s off, and you get the same output back the day you turn it on. Other spend doesn’t behave that way. A person who leaves takes context with them that takes months to rebuild. A research or content program that stops loses the thing that made it valuable, which was that it ran continuously.
So the rule is that reversible spend gets cut first even when it’s performing, and irreversible spend gets protected even when it’s hard to defend on this quarter’s numbers. Performance is the wrong sorting key during a reduction, because you’re not optimizing this quarter. You’re deciding which capabilities still exist next year.
The clearest case in our own business is the research we publish on B2B websites. It took a year to build and it re-runs annually, and the value isn’t in any single edition. It’s in having a second one to compare against. Pausing it for two quarters wouldn’t have saved two quarters of cost. It would have cost us the comparison, and that can’t be bought back later at any price.
The limit worth saying out loud: this assumes you’ll still be here in six months. If the reduction is severe enough that survival is genuinely in question, restart cost stops mattering and you cut whatever is largest. Treating a cash crisis like a strategy exercise is its own mistake.
Nick Baudoin, Founder & President, Alkali
Keep Compounding Research, Drop Speed Tools
First, we cut the new stuff. Then we protected the compounding assets. During the lean times, we kept the research but eliminated everything that just increased velocity. We preserved deep research into a journalist’s recent work because we knew it would pay off six months down the road. We eliminated paid tools we were using just to make things easier, and we replaced them with AI that operates behind the scenes of a human. Here is our guiding principle: if we eliminate something and see a result decrease a few weeks later, then it was just a cost. If we eliminate something and see a result decrease a few months later, then it was an investment. A relationship with a journalist takes a year to establish and one week to destroy, so that spend will always be protected. When you cut incorrectly, the impact is almost imperceptible, and you’ll only see the results two quarters down the road.
Justin Mauldin, Founder, Salient PR
Favor Repeat Purchases Over New Reach
I split every line item into two buckets whenever a budget gets squeezed. One bucket is anything that puts my product in front of someone who hasn’t tried it yet. The other is anything that keeps an existing buyer coming back or telling a friend. My rule is to protect the second bucket and cut from the first.
When I’ve had to trim spend on acquiring new customers, I’ve pulled back on paid channels where I can’t track a clear cost-per-order and redirected whatever’s left toward things like packaging improvements, scent development, or faster responses to consumer feedback. Those moves don’t show up in a Q1 sales report the way a big ad campaign does, and my numbers have come in softer than plan in quarters where I’ve made that trade. But the repeat-purchase rate holds, and that’s the number I watch most closely.
The pricing side matters here too. If I’m also raising prices to offset margin pressure, I need the product experience to justify every dollar. Cutting the creative work or the R&D that makes an everyday product actually worth repurchasing is where companies lose the long game. I’d rather run fewer ads for a quarter than hand a returning customer something that feels like it got cheaper.
End Commitments That No Longer Fit
When times get tight and we’re forced to look closely at our budgets, our instinct is to focus on specific costs. Cancel this tool, pause that campaign, freeze this hire. This approach overlooks the fact that money isn’t the biggest resource that initiatives require. Commitments are even more costly — they take people, they take focus, they take time.
We’ve taken a different approach when looking at costs: Not what can we cut but what have we committed to that no longer fits where we are going. For example, we had an entire workstream that was a fit six months ago, but had become a distraction from our primary offering. It didn’t make sense to keep it because it took our time and energy, and would have been hard to justify during times of belt-tightening. Eliminating this workstream felt like a loss at first, but within 3 months we knew that we’d made the right decision.
During times of belt-tightening, each initiative should be able to articulate how it contributes to serving our clients or building a strategic capability. Nothing else should justify its existence — not past investment, not momentum, not opinion. If an initiative can’t pass that test, eliminate it.
Simon Lee, Founder, We Are Affective
Maintain Quality Checks That Serve Buyers
When we need to cut costs, we make sure that we don’t touch areas that affect customers or business growth. For example, we’re a custom foam manufacturing company so we deal with a lot of custom orders. Getting any of the details wrong in these would mean reworking the order and spending twice as much, so we’ve invested in detailed quality checks to prevent errors and reduce waste before we start producing the order.
We couldn’t cut this out even if it meant we were spending a little more on it because it affects customers directly and also helps improve the business’s efficiency. It may seem like an easy area to cut costs in, in the short term but it’s an important area that needs that kind of investment. Even small amounts of rework and waste can accumulate in the long run which leads to more expenses down the line.
So I have a simple rule where I check if an expense is either improving our work or helping us serve a customer or helping us make a sale. If it doesn’t touch any of these areas, then it’s a cost that I can consider cutting. If it does, then I look elsewhere.
Mike Handelsman, CEO & Owner, FoamOrder
Match Short-Term Cuts to Short-Term Shocks
If it’s a temporary budget cut or reallocation, we act accordingly and focus only on cutting out things that we can temporarily do without. We may pause an admin subscription and take on a little more work amongst ourselves. Or we’ll pause a marketing campaign momentarily and use that time to collect client reviews that we can use when we resume.
But the underlying philosophy is that, if we know this is going to pass in a few months’ time, we don’t make any permanent or irreversible decisions. I would never look at letting go of team members or resource-intensive clients, for example, because building those relationships took a very long time and is integral to what we do, budget cut or not.
It’s a slippery slope because once you start making permanent cuts to solve a temporary problem, you can end up creating a second problem that lasts a lot longer than the first one. So if the problem is temporary, the response should give you a way to come back from it.
Alex Freeburg, Owner, Freeburg Law
Automate Support Tasks, Shield Prospecting
If we have to work with a smaller budget, I think we first look at our processes first and if we can reduce any costs there.
We’ve tried to squeeze out as much as possible with the same resources, whenever we’ve looked at saving.
For example, our SDRs had more time and energy to have fruitful conversations with prospects because we freed them from manual research and other work. It reduced the cost of the process without putting any pressure on our prospecting.
So essentially, what we do in the case of a budget cut is we try to preserve pipeline activities and try to build efficiency around everything else that supports it.
John Karsant, Founder and CEO, LevelUp Leads
Favor Quick Restarts Over Hard-Won Expertise
When a budget gets cut, I don’t start by asking, “What can we eliminate?” I ask, “What will be expensive to rebuild once it’s gone?” That distinction has saved me from making some very short-sighted decisions. In R&D, for example, you can pause a lower-priority experiment or delay a piece of equipment and recover fairly quickly. But if you cut a key technical person, abandon a capability you spent years developing, or stop work on something that is central to your future product pipeline, the savings can look great this quarter and cost you far more two years from now.
My rule is simple: cut what is reversible before cutting what is difficult to rebuild. I’ve used that approach when resources became tight by slowing lower-value projects, consolidating experiments, using existing equipment more creatively, and narrowing the number of development paths we pursued at once. What I try very hard not to sacrifice is the technical knowledge and core capability behind the company’s next generation of products. Cost reduction should make an organization leaner, not less capable. If the cuts leave you unable to take advantage of the next opportunity when it arrives, you probably cut the wrong things.
Vardan Ter-Antonyan MS, LSSMBB, Founder and Managing Principal, Ter-Antonyan Consulting LLC
Invest in Distinctive Capabilities, Reject Generic Spend
When a budget is reduced unexpectedly, I would start by asking which activities drive value and which activities make the organization competitively distinctive. A better approach is to assess the value of potential costs and set priorities based on each action’s potential value and ease of implementation. Organizations should invest in value-creating activities and cut costs in others while meeting clear financial goals in a set time frame. Rather than simply cutting costs, the goal is to think through whether the business can restructure to take advantage of current and projected marketplace trends. I think that means protecting what directly supports the strategy while being much more willing to cut spending that no longer creates enough value.
For deciding what to protect for the long term, I would focus on the capabilities the organization needs most and invest only in those that will give it a clear advantage in reaching the customers it cares about most. Distinctive capabilities are true investments in the future, and companies should protect the value of their most critical capabilities rather than weaken them with indiscriminate cuts. Everything should be on the table, but the answer is not across-the-board spending cuts. The emphasis should shift from indiscriminately striving for a budget reduction goal to strategically investing in the most promising capabilities. That approach supports the investments the business needs to thrive by cutting the costs that aren’t going to propel it forward, while structurally supporting competitive differentiation and sustainable growth.
Chris Reinberg, Founder & CEO, Mindsera
Align Resources With Strategic Strengths
When a budget is reduced unexpectedly, I would resist across-the-board cuts because they are often unconnected to strategy and can fail to make the cuts sustainable. The best-run companies think of cost management as a way to support their strategy and of cost as precious investment that will fuel their growth. They put their money where their strategy is and continually cut bad costs and redirect resources toward good costs. I think the key is to separate the costs that truly fuel a distinct advantage from the ones that don’t. Management teams spend a lot of effort separating out the costs that truly fuel their distinct advantage from the ones that don’t, and they base their decisions about where to cut and where to invest on the need to support their greatest strengths. Connect your budget directly to your strategic priorities; if your budget doesn’t reflect your priorities, you have very little chance of executing your vision. This means viewing costs not merely as an in-year expense but also as a multiyear investment in differentiating capabilities designed to help the company execute its strategy. For me, that is the better way to decide what gets cut now: cut bad costs, redirect resources toward good costs, and protect the capabilities that support the strategy over the long term.
Melanie Excell, Operations Manager | Children’s Rights Queensland Ambassador, Little Scholars School of Early Learning
Delay Major Outlays Until Demand Proves Need
When budget reduction happens unknowingly, I make sure to allocate my spendings wisely. I identify expenses that directly impact our customers and expenses that can wait for long without affecting consumers. This may look very simple but most businesses get messed up because they skip this necessary step.
One example from our operations was delaying the custom mold for the Bramford Sneaker. The custom mold costs $28, 500 and that big amount of money was put off because the current product we’re using was still effective. Putting off that big expense was preferable until we have a proven change in customer demand. So, we retained our first version using a two-piece glue outsole.
The strategy worked until customers reported sole separation during the rainy season and wet weather. The cheap version was replaced with the $28,500 custom-made sole. The delay in the expensive budget investment was the decision that helped us reduce our budget costs. We follow this single rule in our budget, we let the customer demand expose and justify the necessary expensive spending. Waiting for evidence from customers before spending a large amount of money helps maintain our product’s quality without compromising future growth.
Katie Breaker, Director of Sales & Marketing, Birdieball
Sort Expenses by Returns and Payback
When it comes to evaluating what expenses to cut without diminishing the future growth of the business — the rule of thumb is to truly think about it in terms of what you are spending on and what kind of ROI that expense is getting you. The rationale behind spending on anything when running the business is the idea that by spending now you will get some kind of return on investment either today or in the future. What I recommend is tiering out the list of things to cut by ROI and priority (e.g., how long it takes you to get a return).
The first items on the list of course are excess expenses — expenses which no one knows why this money is being spent and the benefit to the company is unclear. Cutting these down should be the first priority and they are the low hanging fruit when it comes to cost cutting. Afterwards, where things become more challenging is when you have legitimate expenses that are worth while and you are deciding between options to cut, neither which are good. In this case, firstly, we need to be able to precisely compare what these expenses get you — if its more revenue, how much more revenue, or if its allowing your company to provide more services, how much more services can be provided. Sometimes we have to decide between cutting expenses that provide a benefit in the long term, however, the short term payback is very low. In this case, an evaluation needs to be made between what the company has available to invest in these longer term ROI expenses, versus what will allow the business to run in the day to day, or what will get a more immediate payback.
Raymond Gong, Senior Partner, Profitability Partners
Remove Hidden Overhead, Safeguard Client Trust
In most businesses, the first instinct when budgets get cut is to go after the biggest line items. Supplier contracts. Overhead costs. The expenses that look the most painful on a spreadsheet. I’ve watched companies do this and it almost always backfires.
After more than a decade in operations and production coordination, my rule is straightforward. Cut what clients don’t see. Protect what they feel directly.
We had a moment a few years back where we needed to cut fast. The temptation was to go after our supplier contracts first because the numbers were big. Instead we audited every internal process and found enough redundancy in our operational overhead to hit the number without touching anything client-facing. Nobody on the client side noticed a thing.
Rebuilding a supplier relationship after you’ve cut them loose costs far more than the short-term savings ever justified. That’s the part most people only learn once. And the same goes for anything that touches the client experience directly, training, response times, product quality. Those aren’t line items. They’re the reason clients stay.
The spreadsheet doesn’t show you what churn costs. That’s why you have to protect the right things before the cuts start, not after.
Kathleen Croes, Head of Coordination and Success, RainShadow Labs
