Whatever you choose to call it…..”the economic climate”, “the downturn”, “the recession”….many companies have to take some responsibility themselves if they have experienced a drop off in performance and a decline in sales.
Why? Because, for eternity, the first thing companies look to cut back on at the first whiff of a tough trading period is marketing. Personally, I have always struggled to understand the logic of this approach. I can just see the Managing Director sat in the boardroom with his team…
“The future looks bleak team. The media is forecasting that we are heading into the deepest recession we have ever experienced.
Getting and keeping customers is going to be tougher than ever. I have been running through a number of strategies and scenarios in my mind all weekend and have come to the decision that we are going to stop promoting the business as it is costing us too much money!
Rather than winning new clients and maximising the return from our existing client base we are going to tighten our belts and hang on to our cash! Hopefully this will then see us through this period of uncertainty”.
It is the equivalent of an animal, storing up food and crawling under a rock and hibernating for the Winter in the hope that:
1) his food stored will last until Spring and;
2) another animal hasn’t appeared on the scene in the meantime, leaving nothing but a barren environment meaning that he will starve to death when he reappears.
The reason companies do this is simple. Firstly, marketing isn’t placed as a central strategic element of their business. They are probably dabbling in it half-heartedly and not even measuring what level of return each activity is generating. Secondly, and because of the first point, they view marketing as a “cost” rather than an “investment”.
Stationery supplies are a cost. First class travel is a cost. Gas and Electric are a cost. Marketing is an investment. For every £1 of cash invested into the business it should be generating a solid return – usually somewhere between £4-15. So if everything you are spending on marketing is, on average, generating you this sort of return why would you stop it when things suddenly get tougher?
However, this is not solely the reason why companies should continue to invest in marketing. It may sound strange but recessionary periods are the best times to invest in marketing because opportunities for businesses actually increase during periods such as this.
The businesses who come out of the recession after actively marketing their business through the period are going to be so far ahead of their ‘cost-cutting’ competitors that it may take years of investment before their competitors are ever close to being on a level playing field again (if ever).
If you have never really marketed your company before as business seemed to just naturally come to you, then now is the time to start as you will be getting far greater value for your money. Because so many people have ‘frozen’ their marketing activity you will find that two key elements mean you will get a much greater return on investment:
1) There is less noise in the market place. This means that your message has a far greater chance of reaching its target audience (if it has been carefully planned).
2) Media channels will be a lot cheaper. TV, radio, press, agencies etc will offer companies much better deals to drive demand.
To me the recession is a period of opportunity and that is one of the reasons why I named my business Opportunity Marketing when I set it up slap bang in the middle of this roller coaster climate! Clever marketing strategies will work in any economic environment – it is just a case of adapting to the situation.
One last point is that it is also interesting to note that with many companies marketing is an “all or nothing” mentality.
However there is obviously a very clear middle ground.
Certainly some businesses will have been overspending on ambitious and ill-conceived marketing activity and the recession has forced them to stop and take stock – which is a positive thing.
However there are many cost effective and clever ways of getting your messages to its target audience, in order to drive up the number of enquiries into your business, without spending thousands of pounds on advertising (including CPC).
Unfortunately many businesses believe that “advertising” is “marketing” – but that is another blog altogether!
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