Great Marketing for Dicey Economic Times
The curveballs that Wall Street keeps throwing are enough to drive an investor crazy. For many, the pressure is too unnerving and they choose to back out. Similarly, many businesses choose to sit on the marketing sidelines until the economy rebounds.
Neither is a smart strategy! Just as any wise investor knows that the best opportunities are found in down markets, the savvy marketing executive knows that this is the perfect time to proactively market their product or service.
Recessions are periods of opportunity that can be taken advantage of or that can take advantage of you. Make certain you know how to capitalize on the great marketing opportunities provided by a recessionary period. The following are four reasons you should market during a down economy and how to go about doing it best:
1. Compounded problems today = more expensive problems tomorrow
When budgets are tight and fewer members of your target audience are buying what you’re selling, even fewer will buy if you stop marketing to them. By cutting your marketing spend, you risk compounding your troubles today and your bottom line will shrink even further tomorrow.
Not only will you sell less than if you had kept your marketing steady, but you’ll cede your core customers to your competition. That means you’ll have to spend more time, money and energy in the future to win them back.
According to “How Advertising in Recession Periods Affects Sales,” by the American Business Press, “the findings of the six recession studies to date present powerful evidence that cutting advertising funds in times of economic slowdowns can negatively impact sales and profit levels on a short-term and long-term basis.”
In fact, when the sales of companies that cut back their advertising expenditures during the 1974-75 recessions were compared with companies that did not cut their ad spend, the statistics were startlingly clear. The companies that did not cut their advertising budgets had increased their sales by more than 200% two years later, while sales from the companies that cut their advertising had gone up barely 50%.
2. Cut through the clutter fast
Marketing is often the first thing to go when businesses cut back on spending during tough economic times. For the smart business, this is a godsend! The usual marketing clutter and noise from competitors are minimized, leaving you with a more captive audience.
Even if you invested significantly in marketing to your core target audience for six months and didn’t sell a thing during that period, it still would be a smart investment. Why? Because the incredible amount of brand awareness and brand preference you will create among your core target audience will pay huge dividends after the economy recovers. To boot, think about how much ground your competition will have to make up.
That’s how Wal-Mart cornered the market in 2000-2001 with its “Every Day Low Prices” slogan. It’s why Intel launched its “Intel Inside” tagline during the early 1990s recession, and why Procter & Gamble pushed Ivory soap during the Great Depression. It’s also why, in 2002, P&G’s president said he planned to do more advertising and take advantage of the lower prices for Super Bowl advertising so they could capture more market share.
3. They are spending – so make it on you!
The truth is, in a down economy, people will still spend money – but only if you convince them that spending their money with you makes sense on both an emotional and practical level.
Therefore, if you’re not actively marketing to your core target audience, another provider of the same product or service, or an entirely different type of product or service, will win their disposable income. Remember, in the absence of pro-active marketing, consumers’ perceptions of, preference for, and desire for products or services will change naturally – very often because they simply forgot about you and something else is now top-of-mind.
4. Spend less and make a stronger impact
Even when a business is cash-strapped, there are relatively low-cost ways to market during a down economy that take advantage of the less cluttered playing field and enable you to enjoy greater dividends than usual. Three sound marketing investments that have great bang for the buck are:
• Brand-centric public relations campaigns focused on reaching and moving your core target audience to action via credible third party sources such as national, regional and trade media coverage.
• SEO – Update your website so that it uses the latest search engine optimization (SEO) techniques. When done well, this will dramatically increase your chances for being found by your core target audience when they do a Google or Yahoo search to find your type of product or service.
• Focus on CPM (cost per 1,000). Buy the advertisement that gets the biggest bang for your buck. Spend a few extra dollars and get a much bigger return on that investment.
Smart businesspeople know what to do when it comes to financial investing during an economic slump. They understand that when they continue to invest or buy even more when the stock market is down, they secure themselves for a stronger future.
Smart businesspeople know that the market will eventually go back up, and when it does, they will be ahead of the game.
The exact same approach is true for marketing – only you’re investing in your company’s future, not someone else’s.
David Warschawski, CEO of Warschawski Inc., can be reached at email@example.com..