What Most Companies Get Wrong in a Recession
Wayne Attwell - Senior Brand Strategist, Bold Horizon
Despite the recession, some companies will thrive and prosper! Just what is it that separates these successful organisations from the masses of also-rans? It's obvious when you read the newspaper or watch the television that the current global recession is gaining some serious traction across almost every possible industry, leaving no one unscathed.
The gut reaction of the business owner or line manager responsible for achieving a financial budget will be to cut costs wherever possible. Where better to reduce overheads than to sacrifice the advertising or marketing budget. After all, it doesn't usually entail any staff retrenchments and it doesn't affect the production operation. Or does it?
Let's imagine that every company follows the flock and cuts their advertising and marketing budget. The net result is that there will be virtually no advertising clutter in magazines, on TV or anywhere else. That would certainly be heaven for readers and viewers, and businesses would all still be on a level playing field.
However, the visionary marketer will see this reduced marketing spend as a golden opportunity to leap ahead of their competitors. The lack of advertising clutter creates a perfect opportunity to expose your brand message or product with minimal interference from competing brands.
So if your competitors reduce their advertising and marketing spend and you just keep yours at the going rate, your effective value will be greater than if they continued advertising. Extending this theory, by increasing your spend you will achieve an exponential rate of growth and enjoy an outstanding level of exposure and attention to your brand message or product, commonly known as "more bang for your buck".
By the time the recession troughs out and your competitors start to think about advertising and marketing again, you will have had plenty of time (months, years?) to entrench yourself as the main player in your industry. In addition, continued advertising and marketing shows strength, optimism and confidence, factors that will be positively perceived by your existing and new customers.
The long and the short of it is - don't cut your advertising and marketing budget in a recession. At least retain your current level, or even better, increase your investment. The benefits will not only be felt in the short term but in the long term as well.
Consumers and customers WILL continue to make purchases through the recession, albeit possibly in smaller quantities. They will buy from someone, so why not show your face and become their chosen supplier? Every sale you make is one that your competitor doesn't, and no sales means they're going out of business fast! That will definitely result in retrenchments and zero production.