Slow Economy? Keep on Marketing!
With consumers and businesses being hit with rising gas prices and a stagnant economy, it is easy to assume that we are either in a recession, or heading in that direction. Either way, you need to understand some key marketing facts to be sure that your business thrives in a less-than-optimal economy.
Marketing Equals Revenue
The mistake most businesses make when their sales fall is that they immediately look to slash expenditures. Unfortunately, the marketing budget is usually one of the first to go. The truth of the matter is, according to research, that a marketing budget is directly proportional to a company's gross revenue. Cutting the marketing budget will not benefit a company from a revenue standpoint; it will only hurt it. Marketing has a direct correlation with revenue, regardless of whether the economy is thriving or stagnant.
Basic Marketing Economics
If most companies are slashing their marketing budgets during a downturn in the economy, it doesn't take an MBA from Wharton to understand what you should do. You need to keep on marketing. If you are able to increase your marketing budget, then do so; if you cannot then you will need to take a different approach. By looking at your overall marketing strategy and evaluating what works and what doesn't work, you can effectively shift money from non-producing strategies to strategies that produce results. Go against the grain by focusing heavily on marketing instead of looking at it as purely as an overhead expense. Without marketing, there is no way your company will meet its revenue objectives, especially in a slow economy.
Stretch- Don't Slash- Your Marketing
If you can't seem to find those additional marketing dollars, you can utilize these simple marketing strategies to help effectively market your company:
- Acquisition of another company
- Customer loyalty programs
- Employee appreciation programs
- Internet advertising
- Internet sales/commerce
- Customer incentive programs
- Outsourcing of non-essential functions
- Reallocate your marketing dollars toward strategies with a higher ROI
In a study conducted by Intuit, developer of QuickBooks, research concluded that despite a stagnant economy, nine out of ten small business owners saw opportunities for growth. Over 75% of these small businesses expected their business to grow within that same year. And this was during a downward economic cycle! To further illustrate my point, 65% of the small businesses tested in the research study have survived a recession before. These small businesses know what to do when the economy goes south. The short answer: keep on marketing!
Shifting Your Marketing Dollars
ImageWorks believes that in order to have a truly effective marketing program, you need to focus on the marketing strategies that produce the highest return on investment. Some of these strategies are email marketing, search engine optimization, and pay-per-click advertising. Each business should have a detailed marketing plan that outlines which strategies yield the best results as per their market segment. If you currently have funds allocated toward marketing strategies that are not producing what you had hoped, think about reallocating your money to the above stated strategies.
Marketing - It Just Feels Right
Sound marketing logic tells us that if our competition is pulling funds and/or decreasing activity within marketing, then this leaves opportunity for a company to gain sales by reaching out to their targeted customer base. Take advantage of your competitor's oversight. Even in a slow economy, you should keep on marketing!
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