“Go ahead. Cut your marketing budget when things get tough. I get it. That’s like saying, ‘I’ll throw some logs on that fire when it warms up in here’.”
For well-positioned companies, an economic recession should not prompt marketing cutbacks, but rather it should spur an aggressive increase in marketing spending to achieve superior business performance according to research authored by Gary Lilien and Arvind Rangaswamy of Penn State’s Smeal College of Business. From 1980-1985, McGraw-Hill Research analyzed the marketing spending of 600 companies. At the conclusion of the study, McGraw-Hill concluded that those firms that maintained or increased their advertising during the recession of 1981, experienced an average sales growth of 275% over the next five years. But those who cut their advertising saw sales growth over the next five years of just 19%.
Athletes often mount attacks in times of stress: strong runners and bicycle racers increase their pace on hills or under other challenging conditions. Similarly, marketing during slow times is like ramping up athletically on tough hills. You become stronger and build momentum. Here are some ideas for marketing during a less-than-desired economy.
- Try to reactivate lost accounts. Contact past clients with a special offer. Reason: They already know you and your company!
- Provide superior service to current customers. Holding on to current customers is even more important during times like these, so be sure they know they are getting their money’s worth from your service. Giving a little extra can mean the difference between ho-hum service and dazzling service.
- Create a structured referral program and incentivize your current customers to refer friends and neighbors to your company.
- Re-evaluate your marketing spending and reallocate dollars from large expenditures into several other efforts like e-mail marketing or postcards.
- Get out there! Be a vigilant networker. Join an active networking group and make the most of it!
- DON’T STOP MARKETING. Coke, GE and Proctor and Gamble continued marketing through the Great Depression and profited in the long run.
A great quote from marketer Chris Lockhead of Mercury: “Go ahead. Cut your marketing budget when things get tough. I get it. That’s like saying, ‘I’ll throw some logs on that fire when it warms up in here’.”
About the Author
June Van Klaveren is the author of The Edge Up – a customer service book for small and home-based businesses – and is an editorial contributor to PCT Magazine, and several association publications. She is a speaker on association programs on topics of Customer Service, marketing & communications. June is also the owner of Compelling Communications, a company dedicated to helping clients acquire and keep customers.
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