A good plan is invaluable. However, there are times when life gets in the way. When this happens, it’s important to take some time to step back, take a breath, and adjust the plan as necessary.
Economic uncertainty can certainly get in the way of your marketing budget. Some businesses may instinctively cut marketing costs, but that approach can hurt more than help. Whether we are in a recession or not, it’s important to figure out how you can maximize your advertising spend during fluctuations in the market
Why Marketing is Your Friend During Economic Uncertainty
At some point, someone had a less than brilliant idea – to cut marketing when times got tough. During past downturns, some businesses saw their marketing budget as a meaty number to trim, helping them save money in the short term.
The problem with this approach is that marketing cuts don’t come without consequences. Like accounting, marketing is a core aspect for so many businesses, and nobody talks about cutting accounting when the market gets tight.
In fact, history suggests that marketing can be even more important during a recession or other economic downturns. The idea that advertising is essential during tough times has been shared in business schools and marketing books for decades. There are also various examples in the past century that show just how valuable it is to not cut marketing during a downturn.
- 1920s – During the Great Depression, Kellogg’s doubled its advertising spend while Post significantly cut its advertising budget. B7 1933, Kellogg’s profits rose by nearly 30% and the brand surpassed Post as the leader in the cereal industry.
- 1980s – McGraw-Hill Research analyzed 600 companies from 1980-1985 to study how companies fared following the 1981-1982 recession. Sales for businesses that did not cut advertising were 256% higher than those who cut costs before or during the recession.
- 2000s – After the 2008 market crash, Virginia-based retailer River Pools and Spas lost so much business they nearly filed for bankruptcy. Instead, they adjusted their installation packages and shifted focus to digital marketing and grew into a national pool-building company.
These are just a few tales, but the larger story is simple - if you cut marketing, people won’t see you. If people don’t see you, they won’t buy you. Your marketing budget isn’t your enemy – it’s a friend ready to help you make the most out of a difficult time. Of course, that doesn’t mean that you can’t work with your friend to find the right path forward for your company.
How to Maximize Your Marketing Budget During an Economic Downturn
Let’s be honest – there is no single solution that applies to every business. If there was, nobody would feel the need to read this post.
The right marketing strategy in a downturn is best decided on a case-by-case basis. However, there are a few best practices that you can follow to set your business up for long-term success.
Don’t slam on the brakes
As you might have guessed by now, it’s not a great idea to drastically cut marketing costs. Think of your marketing budget like driving in a race. If you cut back too much on your gas budget, you’ll either come up short (or worse, run out of fuel before you finish).
There’s a competitive advantage to staying in the race. While others pull over to wait out a downturn, your brand will still be very visible to consumers. There’s also less competition when other companies cut their budget, making it cheaper and easier for you to reach your audience than when everyone is driving in the same race.
Of course, you also want to make sure that you don’t burn through all your reserves and come up short. If you can afford to press down on the gas, great! If not, focus on maintaining your position and speed to come out ahead. If that calls for a slight cut, that’s fine. Just make sure that your car is still out driving when the rest are parked out of sight.
Plan for the future
It can be easy to focus on now when the market is down, but it’s important to also keep the future in mind. Every economic downturn ends eventually, so you’ll want your marketing efforts to put you in a good position when everyone returns to the race.
As we mentioned before, completely cutting marketing spend is a quick way to fall behind your competition. That doesn’t mean that you need to follow the same plan as before. If the current market isn’t great, start positioning yourself to have more success over time.
There are a couple of ways that you can improve the future prospects of your business. One is to focus on efforts where you can get the most longevity, such as ongoing content marketing efforts, creating email automations to follow up on your audience, or developing your social media channels. These efforts can help develop evergreen content and long-term relationships that can pay dividends well into the future.
It's also important to recognize that perception is often reality for your audience. Companies that present themselves as doing well in an economic downturn have a better chance of attracting new customers. Now might be the time to start that new website redesign or launch a digital marketing campaign to show your audience that you’re still diligently serving them. At the very least, it will give your business a head start when everyone else starts marketing again.
Businesses aren’t the only ones that adjust their behaviors during tough times. Customers also need to figure out how to navigate tougher economic times. As such, it’s important to be flexible and adapt to what your audience wants or needs.
Don’t be afraid to change your messaging to fit the times. If your customers still respond to your old messaging, great! Other businesses won’t be so lucky and may need to reframe why someone would buy their products or highlight a new competitive advantage. Changing some tactics now can help you find a new avenue for success.
Lean on your partners
You don’t have to navigate tough times alone. Your vendors are also trying to navigate changes in the market and figure out how to serve their customers (and that includes you).
Don’t be afraid to lean on your vendors for help, both in terms of alleviate pressure on your business and uncovering new ways to adjust your tactics. For example, Aztek’s strategists can work with companies to adjust their digital marketing program, whether they need to scale back slightly or identify new opportunities to set yourself up for the finish line.
Planning your marketing budget for the future? Aztek can help. We work with businesses to solve digital problems and succeed online. Give us a call today to talk about your evolving digital marketing or custom web development needs.