Optimizing Marketing in a Recession
These days, it’s hard to deny that a good deal of personal and professional decisions are being affected by our shaky economy. For many companies, the question of how much of a tight budget should be allocated to marketing seems to come up more and more frequently, and blogs and articles addressing this struggle seem endless.
Much of this expert advice focuses on the benefits of maintaining—or even increasing—marketing spending during a recession. This advice must be taken with a grain of salt, however, as it often comes from people who make their living off of marketing services. Still, this doesn’t entirely discount the assertion that a push in marketing at a time like this could be a good strategy.
“Should I cut my marketing budget during a recession?” is a question a lot of folks are asking. The answer, frustrating as it may be, is: “It depends.”
A 2005 report in the International Journal for Research in Marketing says that if a company is properly positioned with some existing resources and market presence a recession can be the perfect time for a marketing push. The report compares it to a strong runner increasing his/her pace on a hill, which presents an extra challenge to less-well-conditioned competitors.
A well-positioned business should sense an opportunity in their market and go for it by challenging their competitors at a time when they may not be able to keep pace. An example of this kind of business maneuver was Proctor & Gamble deciding to market Ivory soap in the midst of the Great Depression. For a smaller company this may not mean spending more money on marketing at all but rather researching the competition and offering a service they lack. Going the extra mile in the race for customers means even more in tough times.
But what if your company isn’t ready for an all-out assault on the competition? When the economy is down, it’s a perfect time to take a closer look at your current marketing efforts. How have they been performing? Are you getting the return on investment (ROI) that you should from your advertising, website and email communications? Now may be the time to cut back on a component that isn’t working and devote more resources to those that are.
As I mentioned before, you should always keep an eye on your competitors, and this is important even if you aren’t planning to directly challenge them. If you notice that your competitor has been focusing heavily on mass email marketing, this may be the perfect time for you to launch a direct mail campaign. On the other hand, if your competitors are inundating the market with printed pieces that are clogging up mailboxes, it may be advantageous to send that quick email reminding customers you’re just a click away.
Whatever route ends up being best for your company, it’s always a good idea to keep close track of where you put your marketing dollars and what sort of return you’re getting on that investment. This kind of close tracking of—and adjusting to—your market can provide justification for your marketing spending during lean times.
