In an economic slump, many companies experience lower sales and are squeezed by a variety of other financial pressures.
So, how do these companies plan to meet the economic challenge? Some decide to cut staff and expenses, including marketing expenditures. But a slow economy is usually not the time to cut marketing.
In fact, one study by Penn State's College of Business found that a recession should actually prompt an aggressive increase in marketing spending.
The study found that the the businesses best positioned to approach recessions as opportunities to strengthen their competitive advantage,
Companies that increase marketing during hard times — when competitors are cutting back — can generally boost both market share and return on investment.
Aggressive marketing can stimulate demand from new and existing customers. But this doesn't mean simply throwing cash at marketing campaigns. You need to come up with smarter, more targeted marketing strategies.
Historical examples of this include:
Few companies can afford to stop or cut back drastically on marketing — no matter what the economic conditions. New products can be revenue generators if marketed properly. Determine what sets your business and its products or services apart from the competition and proactively market your unique selling proposition.
Here are four suggestions on how to make the most of marketing during tough times:
1. Do more online and email marketing. The high cost of postage, paper and printing is one reason to turn to the Internet as a selling partner, rather than the post office. But there are other good reasons: The affordable cost of online marketing, the ability to communicate with customers on a one-to-one basis, faster results and better tracking capabilities. E-marketing is also more environmentally friendly. Other ideas:
2. Search for media deals. During an economic slowdown, paid advertising rates often decline, as media outlets start to feel the pinch. So you may be able to negotiate a great deal on space. Consider opportunities for barter transactions. For example, a business short of cash may want to make a trade and sharing in the arrangement conserves your company's cash flow. It is not unusual to get more premium placement advertising during an economic downturn than when the economy is thriving.
If you absolutely must reduce your marketing budget, try to maintain the frequency but shift to smaller or shorter, less expensive ads.
3. Don't forget public relations. A PR campaign can complement a marketing campaign at a reasonable cost. By using certain Web channels to distribute press releases, you can get information out to more readers and get listed on search engines.
4. Anticipate how customers are likely to change their behavior and shift your marketing message. Will your customers look for quantity discounts, postpone purchases, negotiate for lower prices or trade down to less expensive products and services? Tailor your promotions and marketing messages accordingly. Emphasize reliability, quality and value.
Bottom line: Companies have a better chance of weathering an economic storm if they look at marketing as an investment and a potential opportunity rather than an expense.
Get in touch today and find out how we can help you meet your objectives.