The value of marketing in an economic downturn
There is one outstanding insight driving the proposition that taking a positive approach to marketing in an economic downturn is an opportunity too good to miss: doing so intelligently will lead to a stronger bottom line, as well as increase the profile and credibility of your brand.
Just look at successful brands like Apple’s iPod, Microsoft and Disney, all of which were actually launched in a recession. The notion of maintaining or increasing marketing spend to create awareness, enhance reputations and build profit is also supported by numerous studies.
As the economic tide ebbs, those that stand up and take a leadership position – including through savvy marketing – will be noticed.
There are other reasons for treating an economic downturn as an opportunity:
- Studies have shown that an increase in marketing spend during a downturn increases market share in both business-to-business (B2B) and consumer sectors
- B2B companies that maintain or increase marketing spend in an economic downturn achieve higher growth both during the downturn and for three years after (see graph). Conversely, companies that cut spend take longer to return to their pre-downturn market share
- As competitors weaken their marketing focus (which will occur) it is an excellent time to pick up disenfranchised customers and deliver a knockout blow to your rivals, whilst strengthening your influence on key stakeholders (e.g. customers, suppliers, regulators, industry influencers such as media and industry associations)
- An organisation’s brand equity needs to be continually invigorated. Communicating about an organisation – its values and its work – is an important way of doing this
- Creativity will give you more of an edge than in ‘normal’ times
- Current organisational stakeholders need to have their belief in, and loyalty to, you reaffirmed. This is an excellent time to enhance existing relationships
- Being positive helps keep and make new friends. Proactive marketing is an example of being positive in a tough environment.
There are any number of marketing initiatives that can deliver quick, meaningful marketing wins. They include:
- refining customer and potential customer databases, then disseminating either hard copy or digital newsletters
- holding customer events that add value to their professional knowledge, with your company being the much appreciated ‘helping hand’
- having your leaders speak at important industry conferences
- instigating a digital communication program that could include your leaders writing a blog, producing an e-newsletter or reaching out to influential online commentators.
None of these need cost the earth, which is key when budgets are being scrutinised. Along with cost, return on investment (ROI) is the other key driver behind satisfaction with marketing spend.
A focus on ROI underlines the necessity to apply modern business’s greatest value marketing tactic, that of a media relations (commonly referred to as public relations) program as part of an integrated marketing approach. Public relations, in fact, includes all of the programs (and more) noted above. Media relations, specifically, includes the generation of issues and topics that the media might want to interview you and write articles on, case studies of work you have undertaken or opinion pieces on industry-relevant topics from your leaders.
There are a number of reasons why a media relations campaign can be cost effective and deliver excellent ROI:
- It enables you to reach a large number of your stakeholders
- By focusing on specific media, it enables you to ‘smart-bomb’ your priority stakeholders
- It gives you an opportunity to take a leadership position on relevant topics and differentiate yourself from your competitors
- The credibility you build by being written about and associated with a reputable media outlet
- The media is a great stimulator of word-of-mouth endorsement, arguably the most persuasive form of communication there is
- It is one of the least expensive of marketing activities you can undertake.
A further factor underlining the importance of establishing a leadership presence in the media is the influence that the latter has on how much people trust your brand. Increasingly, decision makers are looking to their favoured media to reinforce their trust in their existing brand preferences and to guide their product or service purchasing decisions. The current economic situation will only deepen their reliance on the media.
The opportunity to stake a claim in an environment crying out for organisations that provide strong leadership, reliable and value-driven products and services and that clearly value their customers and other stakeholders, will not last for long (though it probably seems like it now!).
The economic downturn is not all bad. Companies that stand tall now will cast a longer, deeper shadow than they will in a booming economy.
What are you waiting for?
Craig Pearce is Practice Director for Howorth Business & Technology Communication
www.howorth.com.au
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Related Keywords: Brand Equity, Economic Downturn, Market Share, Marketing Strategies, Recession, Savvy Marketing
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Public relations is important regardless of the economic climate. Infact when reviewing your marketing, sales and service plan this aspect should be a priority to increase viability, build relationships, maximise your online presense and undertake surveys to capture the needs of your clients.
Perhaps if businesses of all size read such articles and become more educated on such areas, life would be much easier for graphic design and web design companies alike.
yes I think that if a business owner is smart during these times there is actually some money to be made. Franchise owners will suffer most i would imagine, due to the general lack of business sense. Although I could be wrong
yes their is certainly some promising signs there I actually talk a bit about it on my blog http://www.targetwebdesign.com.au/ have a look when your free
This is absolutely the time to redouble your marketing efforts. Don’t let your customers forget about you or your brand simply because they cannot afford your product or service at the moment. Showing them that your doors are still open and you are devoted to excellence and innovation just as much now as you ever were will stick in their minds when the time comes for them to buy again.
Just because you are tired does not mean you should lie down!
Absolutely!
You hit the nail right on the head when you pointed out that practicing creativity now will help your business the downturn ends. I have seen many companies, successful companies, get lazy about their marketing thanks to good market position and a strong marketplace. They lose their creative flexibility because doing the same old presentation or using the materials that ‘have always worked’ generate acceptable results when there are plenty of customers. When the lean times come, relying on the ’same old, same old’ just doesn’t cut it. However if you can get your company creative and flexible enough to survive the lean times you’ll be surprised how much extra business the same approach can garner when the economy is healthy again.
I also like the point about directing your marketing message. So many companies waste time and money on a ’shotgun’ approach; trying to appeal to every customer in a myriad of customized approaches. Look at the big names in business. They spend time on focused marketing plans on hammer away on the one message they want to represent their business.
Of course not every business can ‘Just Do It’ or convince a customer to think ‘I’m Lovin It’, but the smaller you are, the more economic sense it makes to focus your marketing plan and ‘Be All That You Can Be’!
Given that many companies are reducing there marketing plans, you article seems very relenvant. Thank you.
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