“Cutting your marketing budget to save money is like stopping your watch to save time.”
As my old boss used to say, “cutting your marketing budget to save money is like stopping your watch to save time.” It seems to be common knowledge among both business owners and marketers that a recession is the absolute worst time to cut your marketing budget. While knowing what not to do is important, it’s better to know what you should do.
To help, a recent Knowledge@Wharton article offered some helpful advice that’s worth considering: “The first reaction is to cut, cut, cut, and advertising is one of the first things to go,” says Wharton marketing professor Peter Fader, adding that as companies slash advertising in a downturn, they leave empty space in consumers’ minds for aggressive marketers to make strong inroads. Today’s economy “provides an unusual opportunity to differentiate yourself and stand out from the crowd,” says Fader, “but it takes a lot of courage and convincing to get senior management on board with that.”
But as Wharton marketing professor Leonard Lodish points out, weakened demand causes the cost of many of these services to go down. “If your company has something to say that is relevant in this environment, it’s going to be more efficient to say it now than to say it in better times,” says Lodish.
Most interesting, however, is recent research that demonstrates just how powerful this economic downturn can be for companies that take advantage of the environment. According to the article, “a McGraw-Hill Research study looking at 600 companies from 1980 to 1985 found that those businesses which chose to maintain or raise their level of advertising expenditures during the 1981 and 1982 recession had significantly higher sales after the economy recovered. Specifically, companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise.”
Some key concepts for success:
- Craft messages that reflect the times and explain how you can benefit the consumer
- Without dwelling on the economic conditions, realize that certain products require a straight-up approach; be authentic
- Focus on a goal-oriented message that helps people plan for the future
- While some can craft messages based on price, choose value instead
- Luxury products should appeal to emotion, highlighting the escapism, emotional release and comfort in difficult times
- Regardless of the tactic you choose, stay true to your brand
Other gems await… Be sure to read the entire article for more.