Recessions and times of financial crisis are not uncommon for small businesses of late, of course it can be an extremely challenging and difficult time. But we also know these times can be times of great opportunity. And entrepreneurial business owners are best placed to see and take advantage of that given their nature for risk and innovation.
When a recession hits it is natural to immediately look to cost savings for your business. Do you need that large office, can you downgrade software and cut back on freelance expenditure. For some companies they also look to their marketing budget for savings.
This is in my view a significant mistake. But luckily for me (and my obvious bias) it’s not just my view there are a plethora of studies that show companies who continue to invest during tough economic times come out on top.
One of the first things to consider is how you will get through the recession and that of course is going to be keeping enough revenue coming into survive. And when you reflect on the source of that revenue, if working well it’s likely your marketing activities both directly and indirectly leads to revenue generation.
So quite simply if you stop investing in marketing you cut off your lifeline of new business and therefore the revenue you need to keep going.
Another important reason and additional benefit of continue to market during difficult times is the ability to get ahead of your competition. It’s likely some or possibly even many of your competitors will take the short-sighted decision to reduce or even stop their marketing spend. This gives you an amazing opportunity to surge ahead of them and increase your market share.
Studies have shown that brands who continued to market during recessions were able to gain 3.5 times more visibility over their competitors than before. This means done well you can come out of the recession in a much more advantageous position than before to capitalise on.
And this is one of the main reasons why continuing to invest in your marketing during an economic downturn has huge benefits is that you’ll be in prime position once the economy starts to pick up and times are good again.
McGraw Hill conducted a study of the 1980’s recession and found that companies who continued to advertise saw a sales increase of 256% when thinhs picks while those who stopped advertising during the recession and picked up post only saw an 18% increase in sales.
Like the saying goes: “When times are good, you should advertise; when times are bad, you must advertise.”
As always if you’d like help creating your marketing strategy you can request a consultation call with me today.