As the cost of living crisis dampens consumer spend, marketing budgets across the country are likely to feel the squeeze. With a forecast for economic headwinds, companies will, rightly so, be looking at where they can reduce costs. Marketing is often the first casualty. But studies have shown that such a knee-jerk reaction tends not to be the best approach for the long term success of a business and can do more harm than good. Rather a considered reflection on where budgets can be better spent and to focus on how you can get more with less, marketing more efficiently.
Digging a little deeper we can see why.
Marketing budgets are often first for the chop when times are tight because their benefits are generally realised in the long rather than short term. So while a decrease on marketing spend may seem like a good plan, it doesn’t bode well for the longevity of your brand or your communication with customers, without which, you run the risk of becoming irrelevant to them. Your brand awareness will drop, and with it, your search engine ranking and brand loyalty. Instead, use the opportunity to review and revise your marketing spend – it’s a time to tune into customers and the impact the downturn is having on their buying behaviour, and adapt your communication accordingly. View marketing as an investment, not a cost.
If you’re considering scaling back your marketing efforts, you can bet your competitors are having similar thoughts – and many of them will have already made cutbacks, leaving plenty of room for you to fill the void and take the lead on attracting any customers they’ve left behind. People still spend money during a recession, and fewer competitors to choose from spells good news for your business.
While marketing your well-loved, tried and tested products and services should certainly continue in a precarious economy, a time of reduced competition is ideal for bringing your brightest and best ideas into the spotlight too. Economic challenges can drive innovation, as entrepreneurs focus on how to do more with less, and a well-structured marketing budget should accommodate new as well as existing offerings.
With lower disposable income, people go out less, so the number of people accessing online content increases – good news for digital advertisers. Although a significant portion of your audience may not be buying now, it’s a chance to connect with key audiences, and build a relationship that will last a lot longer than the downturn.
Marketing during a financial crisis will always be challenging – not least because it goes against our instincts. Consumer spending changes drastically in difficult economic circumstances – and the most successful marketing changes in response, shifting messages and channels, re-packaging and reinventing value propositions. Past recessions have shown us that companies who bolster their marketing efforts, rather than reduce them, are better placed to survive the slump, and come out stronger on the other side.
This is a time not to stop spending money on marketing, but to change how you spend it, with a view to boosting efficiencies and maximising ROI. From researching customers and re-working a past success to creating compelling offers and price-sensitive portfolios, use this time as an opportunity to be there for new customers and maintain the loyalty of existing ones.