When the economy slows down and money is tight, businesses cut costs – and marketing is usually the first thing to go. That sends a message to the world that your business is closed when you should be conveying the opposite!
Here is why businesses should market more – not less – in a recession:
Increase Top-of-Mind Awareness – Advertising can make or break a company, especially during an economic downturn. Advertising helps to reinforce the brand’s message and values, keeping them at the forefront of customers’ minds.
Build Brand Equity and Increase Market Share – Companies who maintain a strong advertising presence during a recession make it easier to attract new customers and compete in the market. According to Harvard Business Review, “investing in advertising during a recession can help businesses reach new customers, increase market share, and build brand equity” (Chakravorti, 2009).
Gain Customer Trust and Loyalty – When customers are stressed, building and maintaining their trust is more important than ever. Businesses can maintain brand loyalty by living up to brand promises and being someone customers can rely on in hard times.
Get More Exposure and Sales on a Smaller Budget – Do not stop advertising when a recession comes. While budgets are limited, opportunities are not. Brands that capitalize on the advertising discounts available in a downturn get the highest returns on their ad spend.
You can also capitalize on your competition spending less. According to a report by Forbes, “during a recession, less competition can lead to greater exposure and increased sales, resulting in a higher return on investment” (Forbes, 2021).
Beat Competitors – Businesses that maintain their advertising budget while competitors cut theirs will increase their share of voice. This allows businesses to gain market share and long-term benefits. Simply put, your message is more likely to be heard with fewer market competitors.
Reducing Advertising Jeopardizes Revenue and Profitability – Economic downturns tend to be short-lived, so any cut in ad spending will likely be short-term resulting in nominal savings. Meanwhile, you’re putting your brand at a disadvantage heading into the bounce-back period that’s just around the corner. According to a study by the Nielsen Company, “brands that maintain or increase advertising during a recession, versus those that cut back, tend to grow market share and gain stronger positions once the economy improves” (Nielsen, 2009).
Start your Success with MMi Today!
MMi is the advertising and marketing company that helps grow our clients’ revenue and profits. This competitive advantage becomes even more critical to your continued success during financially challenging times. MMi provides the best service by executing effective, full-service advertising campaigns that help your business expand! Reach out to us to discover how we can build a marketing strategy tailor-made for you and help you put a plan into action.