Recession Marketing

How we respond to a recession dictates our success (or failure) not only during, but more importantly after, the market downturn. Companies that can hold their ground through a downturn often become market leaders afterward.

In hard times businesses often look to eliminate expenses, but what about marketing expenses? If a marketing department is properly functioning there should be a direct correlation between our marketing budget and our accounts receivable. Based on this we would all agree that cutting the marketing budget would be a poor idea in a recession. What recessions often remind us, however, is that the expenses of many marketing departments do not have a direct correlation to our accounts receivable. Often marketing departments focus on producing glossy brochures and professional websites that do not necessarily function to support the bottom line.

Refining and Reshaping Marketing
This said, down turns in the economy are not the time to cut our marketing budgets; rather it is the time to refine and reshape our marketing expenditures to truly focus on bringing work in the door. This refining and reshaping should yield an increase in the return on our marketing investment dollars, increasing the correlation between those expenditures and our accounts receivable.  Here are some common changes that you can evaluate to achieve this goal:

  1. Increase your advertising dollars instead of giving your website a facelift.
  2. Incentivize your sales staff instead of getting more mugs with your logo on them.
  3. Cross-train a key person on your marketing staff to provide business development support instead of redesigning your company logo.
  4. Target some new relationships before RFPs and proposals come out instead of using the shotgun approach to pursue proposals (pursing RFPs and proposals that you have no business pursuing).

The Common Recession Mistake
Some functions/expenses of marketing can, and should, be put aside during a recession so that those funds can be spent on marketing functions that are more effective at bringing work in the door. A common mistake during a market downturn is to eliminate the ‘extra’ marketing expenses, but failing to redirect the money towards marketing that will enable you to compete in the highly competitive recession market.

What to do
A recession is the perfect time to sit down with the head of your marketing department to reshape your marketing approach.  Focusing on the marketing functions and expenses can help support your bottom line.

A Last Note
So, why are firms that market heavily during a recession positioned to succeed post-recession? Because people are our most valuable assets, and providing them a place of security during a recession ensures that your best employees will be around as the market picks up momentum. Also, a recession provides a great opportunity to hire the best and brightest from your competition if you are able to keep your bottom line intact. After the recession you then have a foundation for growth and the ability to become a market leader.

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7 Responses to “Recession Marketing”


  1. 1 D. P. Gatten April 8, 2008 at 11:03 pm

    Hi Tim,
    It is interesting that, as we are pursuing ideas for our Marketing Budget that we came across your Blog.
    A very informative post! As some what new to this venue we will always be looking for tips on marketing.
    I never took time to look at that “there should be a direct correlation between our marketing budget and our accounts receivable.” In our small operations it always appeared to be a given. In other words, No thought about a logo to begin with, let alone redesigning it and/or getting mugs with it on them. Those kinds of things would always come later. Anyway, we do agree that there would be some areas to address; for those who had profits to warrant the same.
    Looking at the economy gives evidence that times are changing and that has forced a subtle evolution into how marketing dollars are to be dispersed in the future. Competition always increases where there is a need.
    Yes, you are right that to re-evaluate and re-direct the Marketing Budget during these times is needed, though cutting it would truly seem like a mistake.
    We have known for sometime how important the Marketing Budget is!
    NO Marketing Budget made it so hard to get our ‘Brick & Mortar’ Business going! “I MEAN SLOW!” Therefore, Diversifying and endeavoring to generate additional streams of revenue has brought us to the Internet and we appreciate the goodness of people like you, who are here to help. We will make the effort to peruse your Site to glean all the gems!
    Not having any budget (When We Started!) We began our search on finding something with, which to build one. One thing that caught my eye was a question I stumbled on searching for marketing budgets,

    “What Is Better Than Free?”
    Nevertheless, we found the answer to be in the Jay Conrad Levinson’s M.O. i.e.,
    “Getting Paid For Doing It”

    And Tim, this was right down our alley!
    So now, we will soon be Cautiously GROWING Our Budget!
    Thanks again for the GREAT Post and insight, D. P. Gatten. http://tinyurl.com/2d88ck for more.

  2. 2 Tim Klabunde April 9, 2008 at 1:25 am

    D. P. Gatten
    Thanks for your thoughts and reply… I am so glad that this post was helpful and I greatly appreciate your feedback! You are absolutely correct that every business requires a bit different approach to refining and reshaping their marketing approach in a market downturn. Please let me know if I can ever be of assistance, and again, thank you for sharing your thoughts!
    Tim

  3. 3 Paul Simister June 23, 2008 at 1:18 pm

    When the going gets tough, the tough get going.

    The commitment to and effective of a business’s marketing is going to make a huge difference on how well they come out of the tough times ahead and even whether they will come out of it at all.

    Everyone needs to learn how to market in tough times.

  4. 4 John Poole April 1, 2009 at 11:44 am

    I completely agree with your last note. Companies that hack employees are really just shooting themselves in the foot. They need to be more creative and figure out a way to keep the people that are trained in their system. Laying people off and then hiring new when things pick up, while it may be a good way of getting rid of people you didn’t want in the first place, is for lack of a better term – lazy.

  5. 5 Tim Klabunde April 1, 2009 at 4:56 pm

    John-
    Thank you for your thoughts! I also greatly enjoyed stopping by your Constructionomics blog just now! I just added it to the blog-roll for the Design and Construction Network website at dcdcn.com. I hope we can keep in touch.
    Tim


  1. 1 Marketing in a Recession – Part 2 « CofeBuz - The Marketing and Business Blog Trackback on April 11, 2008 at 11:09 am
  2. 2 Marketing In A Recession | Socialesque Blog Trackback on September 5, 2008 at 12:45 pm

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