7 myths about marketing in economic downturns

In an ideal world, the marketing activity would be self-sufficient, would always pay multiple times what it costs to run it, and would be effective at reaching every potential buyer in the right industry every time. But in the world where the sky is blue, marketing activities are driven by various factors, including perceptions of the company and the chief marketing officer there, economic forces that drive consumer behavior of all kinds, and factors beyond their control. control.

As a result of these factors, marketing budgets are at the mercy of company reactions to these perceptions. Many of these perceptions are flawed, biased, clouded by history, top management’s personal experiences, and most have no historical precedent or foundation.

Myth #1: “Our brand is strong enough that it doesn’t need support during the recession.”

Reality: Few brands are strong enough to survive without advertising, product promotion, and customer service support. Brands are like delicate houseplants: they need attention, support, reinforcement, and polishing (the business equivalent of nutrients, light, and water), or they will wilt and wither to a shadow of their former selves. This is not a position you want your corporate brand to be in when the economy’s growth engine picks up speed again.

Myth #2: “If we cut marketing spending, we can use the money for other things internally and increase the budget when things get better.”

Reality: Studies have shown that once the budget is cut, it takes a herculean effort and a strong internal leader to push it back to its previous levels, and even if it does increase, there are much stronger ROI conditions associated with its implementation . Once those funds are allocated elsewhere, they tend to stay there; after all, that other department doesn’t want to give them up either.

Myth #3 – “No one buys anything, advertising and promotions are a waste of money.”

Fact: Many studies by prestigious business journals and university think tanks have come to the same conclusion based on the data they collected on U.S. and, in some cases, global companies: those that scale back their presence in their key service markets they are in a much worse position. in terms of profitability, market share and competitive presence in the market when the slowdown subsides and profitability growth returns than those who maintain their levels of marketing activity. Those companies that are bold enough to increase marketing activity have a great opportunity to wrest market share from their less aggressive competitors and may dominate the category if the recession lasts long enough.

Myth #4 – “We can reduce [on marketing] now, and then increase rapidly when things get better.

Reality: This strategy has proven disastrous time and time again, especially for companies that have inherent inefficiencies in their design or product delivery channel. That inefficiency will not allow them to “accelerate quickly”, since due to that same inefficiency they will always arrive “late” when timing the market; they are not market leaders but laggards and therefore acceleration activity starts late. relative to the buying cycle, and their more agile competitors are already ahead of them.

Myth #5: “We should examine what works for us and eliminate everything else.”

Fact: This is not really a myth, but rather a knee-jerk reaction to a short-term drop in gross sales. Good marketing departments should be doing exactly that in perpetuity, not just when times are tougher. Why would a marketer deserve his salary if he continued with programs that didn’t work, reducing performance across the board and wasting money?

Additionally, there should be metrics built into any campaign so there is a way to “take the pulse” of its success, and mid-course correction is possible to drive effectiveness and increase ROI on an ongoing basis. In addition, in some channels, there is a cumulative effect that blurs perceptions of what works and what doesn’t: there are interdependencies between channels that are not planned or programmed but live in the mind of the customer and trigger sales without realizing it. Cutting out what cannot be accurately measured hinders this effect, dragging down results for no apparent reason.

Myth #6: “Marketing spends more money than any other department, it has more room to cut the budget.”

Reality: While spending may be a measure of power in some corporate structures, at least informally, return is really what counts when reviewing the budget. Marketing is one of the few departments that can really point out the contributions they make directly to the bottom line. There is a proven cause and effect relationship between gross sales and marketing expenses for larger and enterprise-sized companies. Increased spending on the IT department can pay off in the long run, but better servers don’t often move more products, unless the product is server space. Cutting the marketing budget only reduces the opportunities available to increase market share, increase product awareness and recall in the consumer’s mind, and reduce long-term profitability.

Myth #7: “All of our competitors are cutting back on ad and media spend to save money, so we should too.”

Fact: This type of lemming-like sheep thinking can destroy your business! Your mom knew better than this when you used the excuse “All the other kids are going, why can’t I?” and her response was probably something like “If the other kids jump off the bridge, are you going to jump too?” Despite being competitors, their finances probably look a little different than yours, and it’s foolish to think that you can mimic their moves and be successful. At best, you will be the same! The smart money here is being used to take market share from its more timid competitors, increasing presence and exposure, and cutting other less-than-mission-critical expenses for a short period to do so.

Bonuses!
Myth #8: “We should downgrade the quality of our marketing materials, use a cheaper creative agency, and send mailings less often to save money.”

Reality: This moveset will actually cost you both in the short and long term. You may be saving a very small incremental amount on cheaper paper, shorter and smaller brochures, cheaper brochures, smaller giveaways at trade shows, but the damage you’re doing to your brand and the resulting poor image of the company in your set does so much more damage that it can never be repaired by spending those few dollars later to try and fix it.

Not to mention shaking your customers’ confidence by giving them a visual representation of your company’s poor performance! “Gosh, they must be in trouble, this looks like cheap junk. Maybe I’d better take my business to another company who will probably be around to support their products in the future,” is the thought he’s promoting by downgrading his published materials. .

Good design often costs less than bad design, due to fewer creative iterations, fewer bugs, higher effectiveness, and higher return. Jumping ship from the agency you’re with if they’re handing over spent dollars just to save a little money is foolish. The ramp-up time for a new agency to learn about your needs, your products, your style, and your brand will run out when the average recession ends, and it will have cost you more to achieve the same level of productivity. at that time, just in time to reposition itself for the new economic conditions.

When times get tough, the tough get going in the marketing department, providing the market with visual evidence of your corporate strength, your industry leadership role, your market expertise, and the strength of support you offer to your products and services. Don’t believe the naysayers who want to cut your marketing budget, downsize your staff, and lower the quality of your materials. Everything you do here reflects on the health of your company, and cutting here shows more and helps less.