In 2022 we will most likely face a global financial crisis. Marketing budgets are always the first to get cut, but that will destroy your business. Here are the reasons why you have to market yourself out of a global recession.
Are you struggling financially and want to cut your costs? Are you thinking about cutting your marketing costs? Don't! It really is a bad idea to cut off new business generation as well as remarketing yourself to existing customers. The trick is to keep going, we know it's going to be tough but you will reap greater rewards and here is why we think it's business stupidity to cut your marketing budgets.
During an economic downturn everyone suffers that includes your customers who may be wanting to spend less as well as your suppliers who will be wanting to sell you more to stay afloat. Most businesses tend to start cutting marketing costs as they see it as an expenditure rather than an investment in the business. Your accountant will most likely say the same...but they are all wrong.
Research suggests those that cut their marketing budgets will not only lose sales and profits but they will lag behind their competitors once things get better. Cutting your marketing budget is just a foolhardy approach and very much business stupidity and poor business management. Those that invest in their business during times of economic struggle, this includes those suffering with cash flow issues, will not only trade out of this period but will also be in a better position than their competitors.
Stephen King (not the thriller writer) is a well known advertising guru and in 1990 wrote a white-paper about this very topic where he said "...businesses that cut their advertising expenditures in a recessionary period lose no less in terms of profitability than those who actually increase spending by an average of 10 per cent." According to Stephen, reducing ad spending doesn't help the bottom line.
Your bottom line is very important. It's what keeps money in your bank account to pay bills and ensures that you are profitable. However reducing your advertising budget won't help, it will only hurt it. I understand that from a cash flow perspective advertising budget is something you see going out of your account on a weekly basis, but you should see this as an investment in sales (and in the end profits) rather than an expenditure.
There are many examples of where businesses have kept increasing their marketing budgets during tough financial periods. These businesses not only successfully traded through the difficult times, it gave them increase market share and kept their brand in the minds of their customers where others slipped by the way side.
If your customers are lacking money or interest in what you were saying before, change what you say. A classic example here is Nissan. A ton of their marketing assets were focused about road trips and long journeys with the family. When they realised that their customers were suffering they scrapped their advertising material and started again focusing on "saving money" and "fuel economy" of their vehicles compared to their competitors...guess what? It worked!
During the 2000's recession LG felt that customers were tight for money so where they always promoted "Life's Good" (it wasn't for many at that time!) they changed it to "save Money, Live Better". There was a tweak to their model lineup with some cheaper televisions and this helped them remain a dominant manufacturer. You may have noticed that Sony have tended to drop out of this market in terms of market share...strange that?! Sony didn't change and they suffered accordingly...learn a lesson here!
Now this is the big hitter for things you need to change. This is not about reducing your marketing budget at all, this is about approaching it in a different way. Stop your mass market campaigns, these are great for brand awareness but they will only suck up huge amounts of money. Instead take the budget and create a load of niche campaigns and focus on where your ideal customer is. Today this will most likely be Facebook so get into their feeds and market the new message you have created and the values you promote. Look trusting, build confidence, be a little clever and create something that will make them smile. I am telling you now that this works and we have proven it.
Just to finish, I know it may be easy to look at reducing your marketing budget to save money, but be cute...that's exactly what your competitors are about to do so don't. If anything increase your marketing budget and push your competitors out of the way...your customers will love you for it and buy more from you!