When the economy slows down, you may quickly begin looking for where your budget could weather a storm. If a recession causes revenues to dip, can you offset the damage by trimming your marketing budget?
It may seem natural to cut back on spending, but a look at history will tell you that it might be good to make those cuts somewhere else:
- In the 1980s, McGraw-Hill examined the performance of 600 B2B companies during the recession. They found that among those that increased or maintained marketing, they saw significant growth during the recession and for the next three years. By 1985, those that had pursued marketing strategies had grown 275% more than their competitors that attempted to simply wait out the recession.
- When companies cut costs, it’s not typically a path to a flourishing future. A 2010 study published by the Harvard Business Review shows that they are only 21% likely to pull out ahead of their competitors when the economy improves.
- A ThinkVine report showed that cutting marketing spending during a recession resulted in a 20% reduction in sales by the end of the year.
While initially counter-intuitive, there are a couple of logical reasons why it makes sense that investing in marketing makes for a better future:
You Can Fill the Void: It’s a reasonable expectation that other brands are considering the same budget changes that you are. As more companies determine that they need to pause their marketing spending, your brand will be ready to stand out. You’ll gain not only the sales that other brands are giving up, but you’ll also grow your influence as an expert voice in the industry.
You’ll Build Loyalty and Trust: It’s not easy to find the right message in a shaky economy, but you have the opportunity to reassure your audience and let them know that they can count on your brand. When you express empathy in an authentic way, you’ll build relationships.
Keep in mind that it’s also possible to hit a wrong note. Be careful that your messaging doesn’t appear opportunistic or seem to be making light of a serious situation.
At SJC Marketing, we’re a small business, too. We understand the pressure of trying to grow, or even survive, when you need to cut your budgets. Let us help you with a strategy that helps you get the most possible benefit from your marketing dollars, no matter how few there are right now.