Most businesses are facing the same dilemma during these economic times: What costs should we cut?
Many businesses cut back across the board, marketing included, but a slash and burn method can be a costly mistake. For instance, Ford was outperforming Chevrolet at the beginning of the Great Depression. Ford cut back their marketing efforts while Chevrolet moved forward with an aggressive marketing plan. The result – the two effectively swapped positions in the marketplace. Proctor & Gamble is also a good example – they increased their marketing dollars during the depression, and every recession since, and have seen regular increases in revenue as a result.
The best strategy in terms of long-term ROI is to increase marketing expenditure during an economic slowdown. Boosting marketing investments while competitors reduce theirs can provide a substantial advantage that could be maintained for years.
Marketing should be part of a business’s long-term strategic plan. Marketing drives revenue, and is not discretionary. The challenge is to use marketing dollars wisely. Much like the beginning or start-up phase of any business, when funds are likely low, marketing, public relations and promotion are key. The same holds true in a recession.
Opportunity knocks for those who continue marketing during tough times. This strategy takes courage and a view of the ‘big picture,’ but odds and statistics are on the side of those that view these costs as an investment and not an expense. The recession will end. When it does, the best place for a business is to still be in the game.