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During financial difficulties, the first thing businesses typically cut back is their marketing budget.
While seemingly a logical step, the reality is that continued marketing during a recession can mean the difference between long term success and failure.
In the past several weeks we have been bombarded with updates on the current economic outlook. Intensified stress in the credit markets, falling equity, increased unemployment, and a completely destabilized stock market.
With each news update the economic situation looks increasingly grim. Already the typical consumer has “tightened their belts” because of a lack of confidence in the economy; budgets are being lowered on both personal and business levels.
“Recession” is the term being used to describe the present economy and there have already been whispers of “Depression”.
While no one is “immune” during a recession, often it is the smaller businesses (local retailers and services professionals) that tend to suffer the most mainly because of their “lack” of marketing.
Faced with the current economic crisis, far too many smaller companies are adopting the “wait and see” approach yet, from a marketing perspective (based on historical data) this is a mistake.
When the economy is good and sales are plentiful, losing a few sales is something that can usually be tolerated affordably. It is during an economic downturn when one simply cannot afford to lose sales that as a business, you have the greatest opportunity for online marketing success.
Only a finite number of sales can be made at any given time. For every dollar in sales you make, it means your competitor is not only losing that sale to you but they can’t replace that lost revenue.
Therefore for every dollar in sales you gain, you move ahead of your competition by a factor of 2.
And, since many of your competitors are cutting their online marketing budgets during a recession, your opportunities for marketing successfully are compounded. Because of marketing (or the lack of marketing) the gap between a successful business and an unsuccessful one widens considerably during a recession. There is historical evidence to back this up.
Looking back at the Great Depression we are able to see some solid advantages to maintaining or increasing marketing strategies during a recession. Companies that maintained their marketing budget, increased in visibility significantly compared to their competitors who slid out of public sight.
This knowledge indicates that a recession actually presents the opportunity to move your company ahead of your competition in ways that would otherwise be unobtainable.
John Quelch on http://www.businessweek.com predicted the current economic situation.
Six months earlier, Quelch stated: “This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.”
Dave Chase with iMedia Connection did some research using data provided by Rod Polasky with archaeolink.com. In his article he covers in more detail the impact on advertising and the accompanying rise and fall of businesses during the great depression.
I encourage everyone to read Dave’s article for some fascinating history on some very recognizable Brand names who owe their success in part at least, to marketing during the Great Depression.
The facts presented show people do not stop spending during a recession; they just spend more time looking for a better deal. If you are not visible to your online customers, then your competitor will make the sale. A sale you cannot afford to lose.
While the rules stay the same for marketing during a recession today, the actual strategies have changed significantly.
When people research for better deals, they tend to research online nowadays, since it’s much easier than reading junk mail flyers or browsing through phonebooks, catalogs, newspapers or magazines.
In a time when your competitors have already started cutting their online marketing budget don’t miss your greatest opportunity.
If you are planning on delaying search engine optimization, or planning on cutting back on your marketing budget, take note of such names as H.P., Disney, Kellogs & Microsoft; all underdogs who previously took advantage of their Recession Opportunity…and they remain on top to this day.
Market wisely…but market you must.
Now is the opportunity to step up and be seen. Now is your opportunity to take sales away from your competitor and solidify your business as a leader in your industry for the future.