Part II: The Importance of Marketing in a Downturn Economy
“You’ve got to know when to hold ‘em
Know when to fold ‘em
Know when to walk away
And know when to run
You never count your money
When you’re sittin’ at the table
There’ll be time enough for countin’
When the dealin’s done””
As many of us shelter in place at home and worry that a recession is almost sure to come next, our first inclination might be to fold our marketing cards and walk away. But I can point to scores of research that actually proves the importance of a continued marketing effort during an economic downturn (see a sampling of links with more data at the end of this article). While it is natural for companies to regroup and take a closer look at all of their expenses and overhead at times like these, it is also imperative to consider the long-term ROI that can be achieved through your various expenditures. As you evaluate your marketing efforts, I recommend that you keep the following thoughts in mind.
1. Leverage your marketing and PR efforts as a strategic asset.
A popular adage says, “When times are good you should advertise. When times are bad, you MUST advertise.” Rather than viewing marketing as an expense to be cut during a downturn, it should be viewed as an investment. Staying in front of your customer keeps you top of mind and gives your customers the reassurance they are looking for from known brands.
2. You should maintain or even increase your marketing spend.
Research about the impact of advertising during a recession started with the Great Depression. Roland Vaile published his perspective in the Harvard Business Review in April 1927. He found that companies that increased their ad budgets during the recession grew sales much faster than their rivals, both during and after the downturn. But companies that decreased their advertising spend saw sales decline both during the recession as well as the following three years. Since then, there have been dozens of other studies to reinforce these findings. All of them found that companies who maintained a higher level of marketing during a downturn not only survived it, but came out in a stronger, more profitable position in the upswing.
3. You could leapfrog the competition.
By continuing to market proactively when others are cutting back, you’ll be gaining a competitive advantage. Because some companies simply don’t have the fortitude to continue marketing, this means that your marketing dollars will go farther and be fighting against less clutter. And when the market rebounds, your competitors will ultimately be caught playing ‘catch up’ and will be frantically trying to increase their marketing spend when everyone else is too.
The benefit of staying present and top of mind will compound over time, making your brand even stronger in the eyes of your customers. Not only will you stay ahead of your competition, but you’ll be better positioned when conditions improve. In other words, proactive marketing during a recession really pays off.
Some proof behind this Proof Point:
https://www.marketingweek.com/mark-ritson-marketing-spend-recession-coronavirus/
Check out Part I of this blog series to learn how your brand needs to shift due to the Coronavirus.
