The talk of a looming recession is swirling. And although anxiety is high among investors and businesses during this unprecedented time, there are opportunities for companies positioned well.
It is human nature for company leaders to cut their spending as the economy slows. This often hits marketing and advertising budgets immediately, but brands that continue advertising and marketing during a recession will fair best.
According to Forbes, total ad spending in the U.S. dropped by 13% in the last recession in 2008. Yet the advertisers that maintained or grew their ad spending increased sales and market share during the recession and afterwards.
Why should you advertise during an economic slowdown?
- The wise Henry Ford said that “A man who stops advertising to save money is like a man who stops a clock to save time.”
- You can own your sector and be more visible than your competitors
- You can create a long-term position for your business. As your competition cuts back, you will stand out more. Be bold and win the long game.
- Your audience is online more than ever during these times
- Your company or brand looks trustworthy, secure and fiscally strong during challenging times
- When Sam Walton, the founder of Wal-Mart was asked, “What do you think about a recession?” he responded, “I thought about it and decided not to participate.”
It is not business as usual – make sure your messaging reflects that.
It may seem prudent for marketers to cut back on advertising during a recession, but the truth is that the brands that maintain their ad budget and/or change their messaging can get a long-lasting boost in sales and market share. The best strategy is to go all in to understand your customers needs in this current market and respond accordingly. Be human and it will pay off.
If you communicate well, show compassion and value in your messaging, people will pay attention. And remember that economic slowdowns come and go, and although the sting can last, be careful how you react. There are things you can do now to keep your company in business for the long haul.
Having been party to some interesting conversations lately, it seems the phrase – I don't need to advertise my business I've got work for the next 3-6 months – is a common one. For those who have busy workloads, this great. But there is always a good argument for continuous marketing of your business. No matter how small or big your business, marketing is crucial for its long term success.
Think of it from the customers perspective. Consumers need to see various touch points before they feel comfortable in working with a business. For example, they see you in the local magazine for months, maybe during your quiet months, when YOU think you need to advertise. Your season picks up, you are busy, you stop advertising. That potential customer who saw your ad a few months ago, may now think you are out of business. Your facebook page hasn't been updated in months, it looks dated and out of touch. Your best friend[s] who have been sharing word of mouth recommendations are no longer around. Circumstances change, but the long term success of your business should be brought about from a mix of marketing activity. Strategically placed flyers that were once left in in high footfall areas, are no longr being seen. Never keep your eggs in one basket. The goal of marketing is to stand out and be noticed, online and off. So while you are busy being busy, you need to keep attracting potential customers.
Having work, bookings or sales on the calendar is brilliant, but don't turn off the enquiry tap. Think of how you got that work, it came from somewhere. Was it as a result of a flyer? Did they see your advert in a magazine? Did they visit your Facebook page? Were you recommended? Know where your customers came from, so you can prepare for more! Easier said than done when you are already wearing many hats as a business owner right?? And where possible, ring fence some of that hard earned income for future marketing. It is appreciated that some business regimes, particularly here in France, such as the micro-entreprise can be challenging, as you cannot offset expenses [but you do get an abatement on your self employed tax form].
“Marketing is not a function, it is the whole business seen from the customer's point of view” - Peter F Drucker
Marketing momentum is necessary for all businesses, both large and small, even when you are busy. Much better to carve out small pieces of time for marketing during busy times, than it is to spend large chunks of time and money when the work is running dry. Continuity helps customers of the past, present, and future see that you are still there.