Why You Shouldn't Cut Your Marketing Budget During a Recession
Whether it’s a pandemic or a global recession or your sales have taken a hit, reducing the marketing budget often seems the easiest line item in your budget report to slash.
Many managers and even forward-looking entrepreneurs consider marketing as a non-essential cost that can be cut down to spend more on improving the product or service they are offering. This becomes partially true if the organization didn’t have enough return on the marketing investment as expected or during a recession when sales and/or prices drop significantly.
But even then, reducing the marketing budget is not a good idea for any firm striving to achieve its long-term goals in today’s competitive and ever-diverse business landscape.
Why a Business Shouldn’t Cut Its Marketing Budget
If there’s the slightest possibility your business can sustain in a recession without reducing your marketing budget, you shouldn’t even consider it an option. When a firm resorts to a marketing budget cut, it reduces the chances of approaching new customers.
No matter the economic conditions, tons of people around the world must be searching for your product or service. Even though they may not make a purchase right away, you still want them to get to know about your product and why they should be your customers. Similarly, reducing the marketing budget also affects the existing customers as well. Without keeping them engaged, you’re just encouraging them to look for other brands that offer the same services they want. Putting it differently, this has the potential to wipe out your sales entirely in today’s ever-competitive business environment.
Statistics show that companies survive from the worst recessions or pandemics regularly without cutting their marketing budgets. Believe it or not, many firms deliberately increase their budget just to attract a wide pool of new customers that their competitors have lost. In layman's terms, reducing the marketing budget means minimizing your communication with the customers, making them wonder about the financial stability or innovation strength of the firm. From a business point of view, no company can sustain and thrive without customer retention, and eventually, they lag behind the competition.
Why Firms Should Advertise During a Recession
Marketing your product during a global pandemic may seem counterproductive - but it isn’t. Aside from the fact that the cost of advertising during the recession might be lower, it gives you a competitive edge over other players in the market and particularly those who have stopped all advertising. You automatically become the customers’ first choice and stay on top of their minds whenever they decide to make a purchase.
How to Advertise During a Recession
If the recession has hit your business card and you’re having great concerns about employees’ salaries and benefits, operation costs, and other necessary expenses, it’s still important to not completely pull the plug on your marketing budget. There’re tons of ways to market your brand without spending boatloads of money in the process.
Here’re a few low-cost marketing strategies that any form regardless of their nature or geographical location can employ during a recession.
1. Do Facebook and Instagram Live
Social media is arguably the cheapest and most efficient medium for marketing your brand. Going live on Facebook and Instagram is one of the best marketing strategies to stay in touch with your customers and it is cost-friendly as well. Instead of spending on making high-quality video content, you go out there free and promote your product.
Statistics show that a brand can earn a great deal of authenticity from live videos. Here are a few simple strategies for going live on social media:
· Present a webinar
· Host a question-answer session
· Build hype about a new product or a feature
· Collaborate with other companies or social media celebrities to grow your audience
· Give a live product demo
· Interview credible personalities related to your niche or show a how-to guide about using your product or service
2. Join Facebook Groups
Try to capitalize on Facebook groups related to your niche. Just search for your product or service and see if any group pops up where people have asked genuine queries, such as: "Can anyone recommend a local plumber?"
Respond to the questions and share your portfolio to win the trust of group members. Be open to any criticism you may face but you’ll get new customers and wide reach in a matter of a few weeks.
3. Send Emails
Email marketing is a highly effective way to communicate with existing customers. Believe it or not but almost 72% of consumers prefer email as their source of communication from businesses. Cash in on that!
It doesn’t take more than simple software to send an email to all your customers. Whether it’s the news about the launch of your new product or a much-needed upgrade or a big sale season, the news must reach your customers to keep them engaged.
Make sure the email title is click-worthy. The audience is more likely to skip or spam the email with a boring or mundane subject line no matter how important news it might have included.
Focus on Audience Engagement
Similarly, you will find a plethora of low-cost options to market your brand instead of minimizing the budget. But the goal should be to keep the existing customers happy while attracting new customers. Tailor your marketing strategy to the times we are in and look for ways to connect with your customers through live webinars, virtual events, emails, or other social media platforms.
But if you cut the marketing budget, you’re playing on the side of your competitors and helping them win your customers as well.
Marketing can be the difference between exploiting new opportunities during a global recession and losing your market share faster than you would have thought. If you want to grow and gain a competitive edge, invest in marketing and keep engaging your customers. As there’s a myriad of cost-friendly marketing options to keep your ship stay afloat during tough economic times.