Why cutting back on marketing in a bear market is bull

I won’t say the R word, but we all know these are shaky economic times. Doom and gloom financial reports are making people nervous, and consumers and companies alike are cutting back spending. During an economic slump, budget cutbacks are a necessity, but experts warn companies against lumping marketing, advertising and PR budgets into their “discretionary spending” category.  And for good reason: it’s harder than ever to maintain your client base and reach new customers. Now is not the time to let marketing fall by the wayside.

No matter what kind of business you are in, now is the time to communicate to your customers that you still have a service/product they want/need.  A strong brand will always put you ahead, and an economic downturn can even present an opportunity to outsmart your competition. Many of your competitors may be cutting back on their marketing expenses, leaving your brand to standout in the minds of wary consumers looking for high-value products and services. Now may be the time to re-vamp a tired brand.

Companies with strong brands have historically outdone their competitors, in strong and weak economies. A 1998 PIMS study showed that increased marketing spending during the last recession achieved an average return on capital employed of 4.3%, compared to 0.6% for those that maintained marketing spending, and -0.8% for those that cut spending.

Top five ideas for brand management in an economic downturn:

1. Just do it.  Nike did it during the economic slump in the early 90s.  Reebok didn’t.  Nike upped their marketing budget and created one of the most recognized brands in the world.  When’s the last time you bought a pair of Reeboks?
2. Through good times and bad.  Recessions go away.  A strong brand won’t.
3. Spend wisely.  Just like your customers, your business is looking for value. You need sound business reasoning on all of your investments. The right blend of marketing, advertising and PR can promote your brand and reach your target markets, keeping your business afloat during hard times. Savvy marketing is worth its weight in gold.
4.  Get smart. Pay attention to how your target market is reacting.  Have you noticed a decrease in business?  What can you do to increase customer confidence in your brand and increase brand awareness?
5. Get noticed. Don’t be a wallflower!  Hiding in the corner won’t bring in timid consumers. Reaching your target market with a brand that reflects the strength and uniqueness of your organization will.

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