The economy isn't recovering as fast as we all hoped. Many companies have reacted to the sluggishness by cutting back on marketing expenditures and activity--but that is just the opposite of what you should do. McGraw-Hill studied business-to-business firms that maintained or increased their advertising expenditures during the 1981-82 recession. Both during the recession and for the following three years, these companies averaged significantly higher sales growth than companies that eliminated or decreased advertising.
In fact, firms that maintained or increased their advertising during the recession could boast an average sales growth of 275 percent over the preceding five years. Those that cut their advertising had to be satisfied with an average sales advance of only 19 percent.
Another study, by Cahners and SPI, pointed out those businesses that increased media advertising expenditures during the recessionary period gained an average of 1.5 points of market share. During expansion periods, while 80 percent of businesses increased advertising budgets, no particular gain in share was achieved, since most competitors did the same thing.
So, instead of cutting back in times of economic stress, you should be spending even more promotional dollars to gain market share. While your competitors are "in bed with the covers pulled over their heads" you can be chipping away at their business--if you keep marketing. Not only will you have fewer competitors vying for the market's attention, you can also get some great deals on the cost of promotional space during recessions.
The key is to move marketing up on your company's priority list. Particularly with limited resources, planning is all the more important. If you don't have a written marketing plan, develop one. If you have an existing plan, revise and fine-tune it; what was a good marketing plan in boom times will not necessarily be sufficient in a downturn.
Downturns also give you the opportunity to spend more time with your current customers, gathering feedback and market intelligence. If you don't already do them, now is a good time to conduct formal customer surveys. Your company must build a strong connection with customers and the marketplace to better understand what services they need and what must be delivered to them.
Responsive and proactive marketing is the only way to be competitive in a downturn. When you have this market-centered approach, your business will thrive in bad--and...