It may sound counterintuitive, but don’t cut your marketing budget in a recession.
The past five months have strained organizations to the breaking point. Faced with what to cut, marketing is often the first to go. For example, do you layoff an employee or reduce your marketing spend? Reducing marketing seems far more humane, but it’s a mistake.
Theodore Levitt said, “The purpose of a business is to get and keep a customer. Without customers, no amount of engineering wizardry, clever financing, or operations expertise can keep a company going.”
That’s marketing!
To not only survive the downturn, but thrive, you need to increase your marketing budget. You need to focus on customer acquisition and retention like never before.
But it’s also different. The marketing strategy that may have worked before the pandemic isn’t likely going to carry your business through to the other side. Customer habits and expectations have shifted.
Reduce Purchasing Risk
Recessions make customers more price sensitive. They too are working to do more with less and conserve cash.
The natural response might be to offer discounts and promotions, but look at the underlying need: Customers are looking for a deal to reduce their purchase risk. How can you help them mitigate those risks?
This can be achieved through flexible payment terms, installments, or smaller purchases.
When you find a way to help your customers through the crisis promote it. This can help you achieve greater awareness and relevance with your customers.
Increase Communication and Advertising
According to the Interactive Advertising Bureau, 24% of media buyers, planners and brands paused advertising spending until the end of June 2020, while 46% indicated they would adjust their ad spend across the same time period.
This may seem like a scary stat, but it’s also your opportunity. You can exploit your competitors’ weakness.
Nirmalya Kumar writes in the Harvard Business Review, “During recessions, when most firms are cutting back on their advertising, a firm’s share of voice increases if it can maintain or increase its advertising budget.”
By simply maintaining your pre-pandemic advertising budget you can dramatically out-market your competition. This is a moment for connecting with customers and winning market share.
Speak Directly to Shifting Needs
Even though you can capture more of the share of voice, you have to deliver the right message. After coronavirus, the best marketing is hyper relevant.
Speak directly to your customers’ needs:
- What are they experiencing during the pandemic?
- What is their desired relationship with your brand?
- Can you inject humor or emotions to connect with them more fully?
- How are they using your products and services right now?
And if you don’t know what your customers need, ask them. Create surveys, or pick up the phone and talk to your customers. Ask them about their situation, how they’ve been affected by the crisis, and how you can be of service.
You don’t have to be shy. Your customers want you to succeed, and simply being present and helpful will separate your brand from the competition.
No One Said It Would Be Easy
Faced with hard decisions and lots of uncertainty, increasing your budget is not easy. Frankly, it can be downright terrifying. How can you spend more?
The short answer is you don’t have a choice.
If sales are declining, you need to get ahead of it. This means shifting your value proposition, increasing your communication, and speaking directly with your customers. And as you proceed, being agile and nimble to adjust your strategy as you learn what works and doesn’t work.
The fortunate part is this is not a gamble or even a risk. Marketing done right is a profit center. You’re investing in your company to acquire and retain customers, which is how you will come out of this crisis stronger than ever.
Slingshot Your Business Out of the Crisis
Learn how to slingshot your business out of the crisis. In Crisis Marketing we show you how to adjust your value proposition to generate sales rapidly. If you’re interested, call me (Jeremy Miller) directly at 416.479.4403, or check out our Crisis Marketing services.
