Don’t do it, Chicken Little. Why slashing marketing budgets when a recession looms is a tactical mistake.
The most important rule of marketing is not to follow the herd. Never ever follow the pack. So why do so many companies instinctively do the exact same thing when the economy slows down? Panic, slash marketing, panic some more, then realize you’re either in business or you’re out of business. So stay in business. Because in actuality, an often overlooked opportunity arises during these challenging periods: doubling down on your advertising spend. While it may sound counterintuitive, allocating more resources to marketing efforts can actually yield significant benefits and propel your business forward. Here’s how.
Capitalizing on Reduced Competition:
During an economic downtown, so many companies slash their marketing budgets or pull out of the market altogether. This creates a huge opportunity for proactive companies to stand out and eat share. By increasing your marketing budget, or at least holding steady, you can capture a larger share of voice in the market, allowing you to establish a stronger brand presence. With reduced noise from competitors, your brand messaging has a better chance of resonating. And as we’ll discuss later, that share of mind space does not dissipate.
Maintaining and Expanding Customer Base:
As inflation rises, consumer behavior undergoes significant changes. That’s a nice way of putting it. We’re all a bit nervous. But nervousness should not dictate business decisions. Yes, people become more cautious with their spending, and brand loyalty may falter as individuals seek value and reassurance. But by increasing marketing efforts, you can maintain a strong connection with your existing customers, reminding them of your value proposition and reinforcing their loyalty. Moreover, well-executed marketing campaigns (and there should be no other kind) can attract new customers who are actively seeking alternative solutions due to shifts in the marketplace.
Leveraging Cost-Effective Channels:
Crappy times often present an opportunity to leverage more cost-effective marketing channels. Traditional advertising rates may decline, reps are better able to negotiate, and digital advertising platforms offer competitive pricing. And everyone is gonna flock to organic social which will make things even more glutted. By strategically investing in bigger channels, you can maximize your marketing dollars, reaching more potential customers at a fraction of the cost compared to boom times.
Exploiting Emerging Opportunities:
Bear markets often bring about changes in consumer needs and behaviors. IE, we all freak the f*ck out a little. As a result, new market segments may emerge. It’s a good time to do market research, identify evolving trends, and tailor your marketing campaigns to capitalize on the shifting landscape. Being agile and responsive during a downturn can help your business not only survive but also thrive in the long run.
Once Top of Mind, Always Top of Mind
This is especially important for startups. Plowing ahead is crucial when your competitors are panicking. Competitors will instinctively “pull back”, “ride it out” and “wait for the opportunity” and you’ll have dominated the market with a massive campaign, increased market share, and set yourself up for a huge windfall when things turn. And the space you’ve carved out in everyone’s mind will not disappear. When everyone else zigs, you zag. Bold, fearless companies act that way and they are rewarded for it.
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