What can your company do during an economic slow down?

The answer should NOT be to cut your marketing efforts. This great article by Launch Marketing Group was forwarded around our offices today – and it makes a lot of sense. In economic hard times, often and rightly so, companies tighten their budgets and reduce spending as much as possible. It is a matter of survival as those who spend frugally will most likely not be around when the market goes back up.

But why is it that marketing/PR/advertising budgets are usually one of the first to be cut? Will it really save you money in the long run? The answer is simple – no. If anything it might actually cost you more in the long run. It has been proven that the companies who “go dark” during economic slowdowns have to essentially rebuild their brand when the market starts to go back up. Those who keep on track often increase their sales by a massive percentage. Remember that phrase “out of sight out of mind”? As the article points out:

Remember how difficult it was to initially build brand awareness?  Dropping out of sight until the economy picks up can mean having to reinvent the company all over again.” Maintaining your market identity now, costs much less than rebuilding it later on.

 

During a recession in the 1950′ the two behemoths of retail picked opposite marketing strategies.  Montgomery Ward cut budgets to wait out the recession.  Sears pushed an aggressive expansion and ad strategy even though cash was tight and went on to dominate the  retail business for the next 50 years.

 

In the early 1980’s, the US car market was threatened by the recession.  Rather than hunker down like the dominant GM and Ford, newcomer Toyota aggressively and consistently promoted its cars – you know the rest.

So as budget are taking shape for 2009, just remember that yes, reducing costs is essential, but make sure you think about the long term benefit of your company before you bring out the machete. 

posted by: Lauren

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