Myth #9: Cut Marketing in a Recession to Improve Financials
Unfortunately, many companies make this argument and live to regret it. It may seem like marketing initiatives can be cut when business is soft, but in reality marketing is an investment in future sales and market share. That’s why best of breed companies review their marketing initiatives and strategies, reprioritize, maybe even cancel programs that no longer are appropriate – but they keep investing in their future.
It’s quite possible that on evaluation, the high priority marketing plans and programs made during a more robust, upward economic cycle need to be de-emphasized. In their place should be investments to build market share in a zero-sum or shrinking market by focusing on strengths and exploiting weaker competitors.
New conditions bring new opportunities. For decades, Americans have been trading up in terms of their personal and business needs. Each year we aimed a little higher, focused on a little more affluence. Now, many people are trading down. That in itself creates new opportunities, particularly in cases where customers are trading down from a more expensive solution and may be willing to now consider your offering.
But they can’t consider you if they don’t know about you. This means you need to work to create awareness as well as build trust that you have an offering they should seriously consider. With so many name-brand companies in financial trouble or even going out of business, it’s important that customers feel confident you’ll be around to support them in the future. You need to build trust and credibility, and you need to make customers feel secure and safe. Your marketing messages should be focused on how you help improve your customers’ situation. It’s ok to have lighter-hearted creative marketing, but be appropriate in light of the overall economic situation.
Cutting off marketing investments is a sure-fire way to send out a red warning flag: Warning, Will Robinson! This company’s in trouble. Avoid them like the plague.
Strong focused messages, on the other hand, will reassure customers and reinforce your value to them. In these times more than ever, customers really do appreciate value.
Finally, no matter how dire the economic forecasts get, remember that business cycles are cyclical. This too will pass, and it will be followed by an upward cycle. When that happens, you’ll want to be well positioned to move forward and grow with the market. Organizations that have continued to invest wisely in marketing will be on track to take advantage of these opportunities, and they’ll be way ahead from the folks who took a break, stopped moving forward, and now have to get back in the race from a standing start.