Company presidents and marketing directors must make some tough decisions in a recession.
One of those critical questions is should you continue with the marketing and advertising you currently have?
Or… should you cut your marketing and advertising budget?
Or… should you maybe even increase it?
Having helped marketers through over five recessions, there is some great clarity that has come out based upon our own personal experiences and has been analyzed by researchers in each previous recession.
Critical Question: What Have Past Recessions Taught Us About Marketing and Advertising?
Past recessions have given us some great clarity about the path going forward.
Every recession is different.
Every recession began in a different way all with the common denominator that something the government did to spark it… for example tariffs – increasing and contracting the money supply dramatically creating artificial bubbles such as housing and more…
The consequences affect every company differently.
But… recensions always mean companies having less customers, less revenue, greater unemployment, sometimes its stagflation, sometimes its mild recessions, sometimes it’s a severe recession… and hopefully never again a depression.
What you may find surprising is that the past has taught us that marketing during a recession as a great opportunity to get ahead of your competitor, differentiate your brand, consider strategies you may not have tried before… and dominate your market.
For marketing directors and CEOs, it’s a real opportunity to grow and set up future growth while your competition shrinks. Within a recession, you should consider the realities of:
- Less competition
- Changes of consumer and B2B habits
- Changes in supply chains
Not only does change beget opportunity; advertising is simply too important to skip out on.
As Henry Ford said, “A man who stops advertising to save money is like a man who stops a clock to save time.”
Here is what a few of the research studies have found:
- 365% Sales Increase: A McGraw Hill research study of recession marketing revealed those that maintained or increased their advertising during a recession posted an average sales growth of 256% after the recession.
- 5% x market share growth: In the last recession, only 18% of companies increased their marketing. As a result, their market share growth outpaced other businesses by 2.5 times.
- 9% Grew: Harvard Business Reveals in 2010: 4,700 companies in the 2008-2009 recession. 17% bankruptcy or acquired. 80% slowly recovered or more in 3 years after the recession ended. 9% grew during and after the recession.
- 3 Years Head Start: Frankenberger and Graham (1976-1991): Firms that advertised during a recession increased sales that helped them for up to 3 years after the recession.
Conclusion: Cutting your budget in bad times prolongs the negative effects. Increasing your budget sets you up to dominate your market.
The economic recovery can be a great opportunity to redefine, reposition, and reinvent your company.
We have helped many companies navigate and dominate the market through the recession. Let us help you.
If you’d like to learn more on how to do this, don’t hesitate to give us a call at 615-933-4647 or email Craig at firstname.lastname@example.org