Marketing during the recession can make your company stronger than ever

It’s official; we’re in a recession. Board up the windows and stock up on tinned food and shotgun shells.

Yes, these are tricky times. But the fact is that the recession can actually be a boost to your business and help it to grow — if you avoid one basic, but all-too-commonly made mistake:

DO NOT CUT YOUR MARKETING BUDGET.

There, I said it. I know it feels counter-intuitive. I know that in a recession we all need to make savings. And Marketing, at first glance, looks like an expense ready-made for the chop. This is dead wrong.

Marketing is not an expense. It is an investment, the engine that drives sales. Maintaining your marketing could see your company emerging from the recession stronger than ever. But it’s not just me saying it.

Numerous studies, supported by experience, have proven that in previous economic downturns those companies, almost without exception, that maintained or increased their marketing budgets saw sales increase. Not just during the recession itself but for several years afterward.

It’s not hard to see why. Imaging the total marketing for a particular market sector as a big pie. If your competitors cut their marketing then you, by default, immediately have a bigger piece of pie. However, if you cut yours as well then your piece of pie remains the same relative size as before.

Keeping your company visible in the eyes of your customers is of critical importance at any any time, and never more so than during an economic downturn. The more of the pie you have, the more visible you are. (Simply put, giants tend to be more visible in a crowd than midgets). Meldrum & Fewsmith’s former Senior VP, J. Welsey Rosberg put it bluntly when he said:

“I have yet to see any study that proves timidity is the route to success. Studies consistently have proven that companies that have the intelligence and guts to maintain or increase their overall marketing and advertising efforts in times of business downturns will get the edge on their timid competitors.”
(source: MatrixMT, amongst others).

Okay, enough with the theory and pie analogies.
Here are some hard figures:

During the 1989-91 recession, these companies all increased their marketing expenditure and saw the following increases in sales:

• Kraft Salad Dressing; sales increased by 70%
• Jif Peanut Butter; sales increased by 57%
• Pizza Hut; sales increased by 61%
• Taco Bell; sales increased by 40%
• Bud Lite; sales increased by 16%
• Coors; sales increased by 15%

These amazing increases in market share occurred at a time when other brands were seeing sales fall away. Whilst Taco Bell and Pizza Hut were dancing the jig of joy, McDonalds saw sales fall by 28%.

The reason? They cut their marketing.