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What Smart Brands Know About Marketing During a Recession

Maintaining marketing efforts during a recession can keep your brand at the top of consumers’ minds.

Budgets are at the center of every conversation when economic times are tough. Being fiscally responsible is always prudent, but should you pull back on your marketing efforts during a recession?

While some argue that we’re not yet currently in a recession, these are trying economic circumstances with high inflation rates and a rocky stock market. But if history has told us anything, cutting back on marketing efforts during times of uncertainty is not a good move.

The Side Effects of Ceasing Promotional Activities

According to a 2018 study at the University of South Australia’s Ehrenberg-Bass Institute for Marketing Science, when a company stops advertising for a year or more, its sales decline by 16% in year one, then decline by 25% after two full years of ceasing promotional activities.

And it’s not the big companies who get hit the hardest by stopping their marketing efforts. The smaller brands tend to suffer the most.

Layoffs are usually the first action taken when budgets suffer during a recession, followed by what are perceived to be non-revenue-generating expenses. Marketing too often gets lumped into this category.

Why You Need Marketing During a Recession

You have to remember that consumers are also suffering when the economy is tough. They have tighter budgets for just about everything, but that doesn’t mean they stop spending altogether.

What marketing does is keep your brand relevant. Your current customers should continue to receive information from you that reminds them why you are valuable to them. You’re inevitably going to lose some of your current customers, but when you continue marketing you also have the chance of gaining new customers, even during a recession.

A study on how the cereal brand Kellogg’s handled marketing during the Great Depression of the 1920s provides a helpful example. The decision was made to invest in radio ads to promote a new cereal and profits rose by 30%. The study also profiles Toyota’s marketing decisions from 1973-1975 during the energy crisis. There was talk about making cuts to the marketing budget, but they took a chance and stayed with their long-term marketing plans, resulting in them pulling ahead of Volkswagen as the top import carmaker.

At SJC Marketing, we’re committed to assisting our clients whether the economy is booming or not. We develop marketing strategies that are customized to fit each client’s unique needs. Contact us today and learn more about our process.

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