As the cost-of-living crisis squeezes individuals, many businesses are starting to feel the strain as well.
Slashing budget lines seems like the obvious route to take. And, sadly, marketing is often one of the first on the chopping block.
If some of your marketing efforts aren’t working out for you and it’s not helping the business grow (or at least maintain it’s position) then maybe cutting is the right route to take. But, you should always try to maintain the marketing that is working. Because, in the end, businesses last longer than recessions.
Cutting the marketing budget might relieve the strain in the short term, but you’re actually removing a source of long-term stability and growth from your business. Marketing is an investment, and investments need time to grow.
So, let’s take a closer look at why cutting your marketing budget might not be the right way to respond to a recession.
The lasting value of marketing
During the 2008 recession, brands that invested in their marketing and took advantage of lower costs to boost their Share of Voice (SOV) achieved impressive business gains, including five times the annual market share growth in some cases.
Times have changed but the principle remains. Recent studies found that taking marketing action early on during a recession keeps businesses afloat and delivers immediate value.
Recessions are risky times for everyone, but cutting your budget only detracts from your momentum. Maintaining your marketing budget in the right areas means you’re maintaining the return you get on that investment. And in a recession that return is vital. It includes:
Maintaining your competitive advantage
If you can maintain your budget while others are cutting theirs, your investments will have greater impact. Therefore, you grow your share at the expense of those that don’t share your confidence.
Furthermore, the experience from the COVID-19 pandemic was that advertising rates plummeted as advertisers became nervous. Tough times therefore can potentially lead to bargains that will make your investments work even harder.
Building your brand value
Strong brands find it easier to maintain their prices during a downturn, according to HBR.
A solid brand builds trust with customers and keeps them coming back. Left unattended a brand will gradually lose value, as does a property left to degrade and crumble. Branding takes continual investment, evolution and promotion to retain and grow in value.
Remaining relevant
A recession changes people’s priorities. It’s marketing’s job to listen to the customer and bring insight into the business. Maintaining investments in research and development means you don’t miss an opportunity to adapt your products or introduce new services.
Equally, if the social climate changes—such as in a recession—the external perspective marketing brings helps you adjust your messaging and approach to match your customers’ mood and retain their trust.
Futureproof your marketing strategy
Marketing isn’t just about brochures and vibrant advertising. It’s a core element of your company’s growth strategy. If you take a more measured approach to an economic crisis, you’ll find yourself in a stronger position when you come out the other side. In the end, it’s all about staying positive.
Want to make your marketing strategy solid enough to survive shifts in the economic climate? Take our marketing maturity assessment today.
