Marketing During Tough Times

[KristineS]

The conventional wisdom, at least so far as I've read, has always been that marketing budgets should if not increase at least not decrease during tough economic times. Despite this, I've been hearing that a lot of companies are cutting back on their marketing.

What's your opinion? Do you think spending on marketing during tough economic times can help you better your position in the marketplace? Do you think it will also bring benefits when the economy is better? I can see the sense behind the recommendation not to slack off, but I can also see why people are nervous.

[Patrysha]

I think tough times call for marketing smarter, not necessarily more (although if you have been relying on word of mouth then it might be time to invest in a simple marketing plan to ensure you cultivate existing relationships).

I also think if you've been following a guerrilla approach already, that the market fluctuations should have little effect on your plans.

If you don't have a clear marketing action plan - it's time to develop one...

If you do, well then all you have to do is follow it (assuming it was based on solid foundations) with an identifiable target market and an affordable stepped approach)

[orion_joel]

I think that maybe where a lot of cutting back on marketing comes from is businesses that look at marketing as nothing more then a line item on their Profit and Loss Statement. As the economic times get tougher and tougher many businesses will see a range of line items. There are the items they cannot change, eg lease, power, ect. Then there are the items that may ahve already been cut back as far as possible, Staff, Training, Technology, ect. Finally there are the items like marketing that they have resisted cutting, but due to a wish to, i don't know keep eveything in line, or to improve profitability.

While i agree that cutting marketing spending can be a big hit especially in a poor economy, i can to some extent understand reasoning behind it. While i have not had the chance to see many business wide balance sheets, at a profit center level, everything often seems to be worked out in dollar figures and then as a percentage of revenue. Mostly they have a range that they are expected to operate in, for example depending on the business wages may need to fall within a range of 8-15% of revenue(usually a smaller range but they are the extreme's i have seen). I would expect they look at marketing in the same way.

[Baseline]

Depends on your size. If almost all of your work is word of mouth and past service... you don't have a marketing budget, to speak of. Cards and a brochure.... but you need to track where your business comes from, and also where you want it to go. If it's word of mouth, a splashy ad in a trade journal doesn't make sense; unless you are trying to expand your visibility with the readers of that journal. So make the plan first- figure out the best use of resources next.

IMHO.......

[KristineS]

I agree with all of you. I think what intrigues me is the tendency that a lot of businesses seem to have to hunker down during tough times and still assume that customers will be there and waiting when the company chooses to talk to them again. In today's market people have really short attention spans for a lot of things. You have to keep them engaged or you'll lose them.

[SteveC]

It all depends on what you class as marketing... the most important thing with marketing is that just like everything else in business it is meassured and made to be accountable... if it delivers then fine, increase it... if not then you need to change your marketing to make it deliver better results.

Perhaps a better question is what exactly is marketing in a small business?

[orion_joel]

As i said before to many businesses look at it from a numbers point of view. Just using some examples here, for a company with Revenue of $500,000,000, they may have a comfort zone of 3-4% on marketing or $15-20 million. So they set the budget in the middle at $18 million. If they had a really bad year and only had turnover of $300,000,000 and had managed to keep all other expenses in line without looking at marketing. when they look at marketing they are going to see it sitting at 6% of revenue a full 2% above their comfort zone. There would be a good chance in this case they would slash that budget, probably in half, because their is a good chance that most people in the position making that decision are basing it solely on financial data and nothing else.

[vangogh]

I'm going to pretty much agree with everything that's already been said. I think you should continue marketing during down times. You just want to be smarter about it. I suspect some companies are concerned with cutting expenses and so cut any expense they can. Others though could be cutting marketing that thy haven't determined is working effectively.

When cash is plentiful some might experiment with marketing and may be more willing to leave certain things in place where they really haven't measured the effectiveness. When money gets tight they cut that marketing.

It should come down to ROI. If you make $150 for every $100 you spend, why would you stop?

[Ad-Vice_Man]

If you're not turning your lights off and locking your doors, you shouldn't turn off your stream of customers.

[BillR]

There's no such thing as marketing during tough times.

With the exception of vanity/luxury products there are only two things people sell - things people need and things that in one way or another save them time or money.

If you have a value proposition to prove you can save someone time or money - or give them a skill/service they need for a fair rate - then it's really a matter of how you distinguish yourself.