When business is booming or you are expecting a busy season, it makes sense to invest more resources in marketing your business.
But what happens when sales are not as high? Do you keep on
sustaining your marketing efforts? Do you scale down or stop altogether?
Cutting down marketing costs seems less painful because it
does not involve firing anyone.
During recessions, you can fall back on your loyal customers
to give you some cash flow and maybe even open up some new revenue streams.
At this time, you have to be careful to discern which
marketing costs are absolutely necessary and which you can do without.
You don't want to hurt your business further instead of
saving it. Continuing to spend money on marketing that doesn't add to your
bottom line is a waste.
On the other hand, if your effort to save on marketing ends
up costing you money, then you are sabotaging your own survival.
A strong brand that consumers find familiar and trustworthy
is more likely to survive in the long run.
Take a market downturn as an opportunity to get rid of any
advertising spending that is yielding low returns on investment. It is not a
good time to hang on to less effective advertising tactics.
It is also a time to look for more efficient and innovative
ways of meeting the needs of your customers.
There is no evidence that online sales alone can carry a
company. But what we have seen from 2008 and 2020 is that online sales
generally stay high during downturns.
In the recession of 2008, online spending only went down by
2% compared to a drastic drop in overall spending. From the 2020 experience,
Amazon has not only made more money but has also become even more powerful (if
you can imagine that), from the pandemic of 2020 that has left so many people
out of work.
The fact that Amazon is scaling up at a time when most other
retailers are cutting down is proof that online sales are not as badly affected
as offline sales.
Obviously, not every business is going to grow during an
economic downturn. The goal, as some have thoughtfully opined, may be to just
survive. Growth is a bonus.
For others, the goal might be just to avoid firing people.
Some businesses are celebrating because they are making 70% of their usual
profits at a time when others are doing far worse.
When the economy is down, there are new challenges and new opportunities
for business. Don’t just ride it out passively in hopes that you will survive
the storm. It puts you in an extremely vulnerable position where you are more
likely to become a victim of change.
Taking a proactive approach to your marketing may be the
difference between making it or not making it.
Anticipate different scenarios and ensure that your team is
prepared for all of them.
With all the upheaval that is going around, there is a
chance that the needs and wants and motivations of your customers have also
changed. This means that any time you invest in understanding your customer
afresh is not in vain.