Strategic Spending During Economic Uncertainty

Photo by Fabian Blank on Unsplash

“The man who stops advertising to save money is like a man who stops the clock to save time.”

-Henry Ford

Henry Ford’s quote applies to all spending around advertising, marketing, sales, social, etc. – a brand’s intention to stay top of mind among consumers. That connection to consumers whether it’s a brand story, informing the market of new products or staying in a consideration set for conversion is essential to keeping a business in the green. Many companies have halted spending among the economic uncertainty, and this in my opinion is a mistake. Cutting spending in tough economic times is not a long-term strategy and can have dire consequences. When you reduce engagement with your target market, there is a disconnect and that leaves opportunity for a competitor who is communicating with your base. Dominating mindshare is crucial to staying at the top of a buyer’s consideration for purchase. Out of sight…out of mind.

Many companies are seeing a decline in revenue and need to cut their expenses in order to stay positive for the quarter. Publicly traded companies are even more vulnerable because if their quarterly report to shareholders doesn’t reflect positively, their stock price could drop. And for smaller companies, it’s an issue of cash flow and as a small business, I understand that. It’s not easy to continue to market in tough times, but this is where creativity has to be at the highest levels. Tighten the belts and figure out a way to connect with consumers on some level.

There are some pretty potent benefits to marketing when a lot of companies are pulling back.

1.     Less competition in the marketplace: if the competition is not marketing and a brand is, the active brand has traditionally closed the gap on market share and sales

2.     Less noise: with less marketing messages in the face of consumers, a brand is more likely to stand out and really connect with a consumer

3.     Basic economics: less demand lowers the price. It’s like bargain shopping getting more bang for your buck. Christmas ad spending is expected to drop as much as 10% so plan accordingly

Below are some approaches to maximizing your marketing dollars and sales strategies:

• Get creative telling your brand story through cost effective measures such as social campaigns

• Reassure consumers with brand messaging that forges an emotional connection. Build brand trust and familiarity

• Showcase the value of the product

• Offer discounts for bulk purchasing

• Reward loyal customers to avoid switching brands for a lower priced option

• Special pricing and promotions

Brands in the past that have pushed through the tough times have reaped the rewards and grown in market share, sales and brand awareness. Kellogg’s continuing to spend during the Great Depression allowed them to overtake Post and they never looked back. Taco Bell (40%) and Pizza Hut (61%) both increased sales during the early 90s amidst a recession while McDonald’s, who had dropped their advertising and promotional budgets, declined by 28%. Amazon grew by 28% in 2009 just after The Great Recession caused by the housing crisis by launching the Kindle and providing consumers with more choice at a lower price.

All of these examples capitalized on a bad situation. The time is now to take a risk and continue to push through with the bigger picture strategy in mind. Make choices today that will impact the growth of your brand and never look back.

Kellogg’s doubled their advertising during the Great Depression with a focus on Snap! Crackle! Pop! to drive sales of Rice Krispies

Taco Bell launched their “Why Pay More” menu during the recession of the early 90s to focus on value at a low cost for price sensitive consumers