I’ve seen, read, and heard all kinds of reasons about why you shouldn’t cut marketing budgets in a recession. We all know this to be true from observations and outcomes of those who did and did not in past recessions. But of course, most of the chatter comes from people like me, marketing professionals. And I know, on the surface, it all seems quite self-serving.
Except, this time, (if it actually is a recession we’re in) that school of thought receives what some might perceive as a mildly surprising endorsement from-most CFOs. In a CFO Outlook Survey-1st Quarter 2008 conducted for Financial Executives International by Baruch College, The City University of New York, more than 62% of CFOs responded that the current economic downturn would not affect marketing/advertising budgets-budget is the same as 2007. Almost a quarter, 22.9% were actually increasing marketing budgets. Just under 14% were decreasing budgets. You can download the survey’s detailed summary topline report at www.cfosurveys.com. There’s a lot of good information in it.
That’s not to say, in a challenging economy, positioning strategy, channels, and messaging shouldn’t be examined, reviewed, and if necessary, refined. Perhaps, this is the time to dedicate more energy and resources to cultivating and growing potential opportunities with your loyalty customer base? Or perhaps, seek growth opportunities within vertical markets? Should messaging be revised to address customer pain points right now—higher raw materials costs, fuel and transportation costs, employee productivity improvements—and your solutions to these problems? Maybe it’s time to re-evaluate channel allocations. Could this be the time to strengthen your online presentation and presence through website optimization, so that the live prospects who are looking can find you if you haven’t found them first. And of course, whatever channels, the money has to come from somewhere. Less print? More direct mail? Fewer trade shows? More online investment?
What was it that we learned from companies who raised, stayed, or folded on marketing initiatives in past recessions? Companies (brands) that don’t cut marketing spending in a recession grow faster—nearly double the growth of competitors that do. Plenty of studies back that fact up, for example, the often cited McGraw-Hill studies analyzing post-recession sale performances of B2B companies follow recessions in ’74-’75 and ’81-’82 along with numerous consumer brand studies over several decades. (So there, I’m not just thinking about myself!)
Where do you fall in that mix? If you’re in the 14% minority-chances are some formidable competitors are in the 86% majority looking for an opportunity to eat somebody’s lunch? Namely, yours.