All companies go through financial peaks and troughs. It’s just part of being in business and I think you’d be hard pressed to find a company that hasn’t experienced the stress of a tough economic climate.
During these financial troughs, it is normal to see belts being tightened and spotlights on budgets to ensure every dollar is spent wisely (or not spent at all!). But what I find interesting, is that one of the first areas companies often stop spending money is brand and marketing. It is almost never the marketing people who would suggest cutting the marketing budget during tough financial times, but as is often the case, the decision may fall to someone more senior who sits across all the business units.
There are many studies showing that companies who maintain or even increase their marketing budget during slow business times are the ones that continue to grow, whereas those who opt to reduce their marketing budget see a decrease in sales. If you think about it, it’s really just the basic principles of advertising; if your message is out there, people will see it and respond. If you remove all your messaging, then the market will see your competitors’ messages and respond to them instead.
Strategy is key
Anyone who knows me will know that I often harp on about how important strategy is. During slow business times, your brand and marketing strategies will need to work hard and this is why they are so critical to the success of a business. But if you've decreased your marketing budget and are channeling funds elsewhere, you’re effectively setting your strategy (and your marketing team) up to fail. At the end of the day, if you do not continue to promote your business, your sales will decrease. If your sales decrease, so does your profitability. And here starts the flow on effect.
With a robust brand and marketing strategy in place, you know your marketing dollars are being spent targeting the right audience with the right messages through the right channels. If you don’t have a strategy in place, a slow business time is the ideal time to get one written and implemented. It will provide direction for your marketing efforts and comfort that money spent is having a positive impact on sales and growth.
Make better use of your resources
Outsourcing your brand and marketing work to an agency is one way to make better use of your marketing budget. Instead of having to carry the costs of a large marketing staff, you can keep your marketing team relatively lean and channel projects through to an agency. And you’ll still have a team of experts at your fingertips to support and guide your decisions.
Just remember, if you’re one of the clever businesses who continues to market and promote during an economic downturn, there will be plenty of businesses who don’t …. Whose messages will your market be seeing and responding to?!
And I’d like to leave you with one last thought; don’t think of marketing as an expense, it’s an investment, and a pretty sound one at that!