Why Companies That Slashed Marketing Budgets in 2008 are Kicking Themselves in 2012
When the economy took a turn in 2008, many businesses began to examine their operating budgets, looking for ways to cut costs. The marketing budget was often the first to get reduced or, worse, eliminated. The results of this hasty, reactive decision are highlighted in noted marketplace absences as the economy begins to improve. Organizations who slashed marketing are now realizing that this budget cut could have been very costly.
Below are a few reasons why a poor economy should dictate sustained—or, preferably, increased—marketing budgets.
- The Cautious Consumer: In an uncertain economy, the cautious consumer craves information. They become more thorough in their product and service research to ensure that they are getting the most for their hard-earned money. They scour print publications, online resources, consumer reports, and news segments for recommendations, information, and reviews. They solicit opinions about products and services from their friends and family. If you have cut your marketing budget, chances are you are no longer visible in your marketplace. The consumer isn’t finding information about you or your product/service anywhere and, in their minds, this is translated into poor quality or lack of organizational credibility. You are off their list.
- The Longer Sales Cycle: When money is tight, it takes a longer time for consumers to decide when and where to spend it. And, although they are thoroughly researching (see above), their interest in your service/product may stall at some point. That is why it is so very important for you to invest in a specific, multi-faceted campaign that hits your target market consistently, over a sustained period of time. Marketing campaigns in booming economies look very different from those in more dire economic environments. It takes the right message, presented the right way, over a long period of time to influence prospects throughout this elongated sales cycle.
- The Us vs. Them Mentality: There is a groupthink dynamic that occurs when the economic outlook is poor. Individuals assume that organizations are doing well and not concerned with the plight of the everyman (woman). It is an us vs. them mentality, an extra wall companies must scale before earning the trust (and then business) of the consumer. It requires a strategic approach to messaging and product/service storytelling that is relatable and resonates with the target market.
Bottom line—you either invested in marketing when the economic outlook was bleak and stayed in front of your target markets (and moved past your competitors), or you didn’t. If you did, your approach—and message—will need to change as the economy begins to improve. If you didn’t, you will need some strategic guidance on how to best reenter the marketplace and explain your relative absence. We can help with both.