Managing Marketing Budgets In Tough Economic Times

There’s no doubt that all businesses are facing tough economic conditions these days. Fortunately, it’s not those conditions that determine the future, but how our companies respond to those conditions.

When the economy tightens – as it always does at times – the first action of many companies is to cut costs. Too often, marketing and sales is one of the first cuts. On the surface, this seems like a wise decision. However, cutting sales and marketing may prove detrimental to your company as a whole.

This is our sixth recession since 1970.

Our country made it through recessions in 1970, 1974-75, 1981-82, 1990-91, and as recent as 2001. Think about this for a moment. Was your company in business during any of these recessions? Did you stay in business? Did you keep your job and avoid ending up broke and on the streets? You probably answered yes to all three questions. Are you still in business today? If so, let’s take a collective deep breath and realize we’ve been here before and we’ve made it through.

In tough economic times, what does your company need most?

If you’re like most, you need sales revenue and customers. Ask yourself and your team how reducing or cutting the marketing budget (that brings revenue and customers) is a prudent and smart thing to do for your company. Keep your marketing budget the same or increase it, and make sure your marketing investments are delivering what you need most – sales revenue and customers.

Various studies on the impact of marketing spending during various recessions all point to the same conclusion: “Companies who maintain or increase their marketing budgets during recessions experience sales growth two to three times higher than those who reduce or cut their budget. And not just during the recessionary period but for up to two years after.”

Don’t be afraid to go forward with your marketing and maintain a quiet and calm confidence that in times like these, many of your less informed competitors will reduce their marketing budgets. In doing so, they’ll create more space for your company to capture and increase mindshare and build market share. Do everything you can to make sure your marketing and tradeshow investments are positioned for maximum success. It’s important to get involved, use the ideas that make sense for you and keep your company and our economy strong and growing.

SOURCE: Jefferson Davis, Competitive Edge

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