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Cut marketing costs, not marketing profile

"Customers who notice your brand has suddenly fallen silent will soon smell failure."

That warning, issued last week by the Chartered Institute of Marketing's director of research and professional development, summarises the danger of making big cuts in marketing budgets – they can tighten the vicious circle, accelerating any downwards spiral in sales.

But it doesn't have to be like this.

Option 1: Gain market share at reduced cost

Recession is an opportunity to gain market share while over-cautious competitors cut PR and marketing budgets so far they disappear from customers' radar screens.

Research dating back to the 1920s shows that companies who increase their marketing spend in recession also increase their market share and achieve higher growth several years afterwards.

For this very reason, at full-service marketing agency PRG we are cranking-up our own marketing activities right now, even though our order books are as healthy as they have ever been. Recession is an opportunity to take business from competitors who have been frightened into inactivity.

Option 2: Slash marketing budgets and marketing profile

You might simply cut PR and marketing budgets and sit there waiting for the sales to come in until the economy starts recovering, however long that takes.

You'd better hope your competitors are doing this – because companies who slash marketing budgets and then have to recover lost market share will typically require a marketing budget in the year after recession that is 60% higher than the amount they cut.

Option 3: Maintain marketing profile at reduced cost

If budget cuts are unavoidable, find ways of reducing your PR and marketing profile less severely than you reduce your marketing spend. This will be challenging, perhaps very difficult - but it can be possible to optimise your marketing budget so that every pound you invest achieves greater results.

A marketing agency may not know much, initially, about your business, but that will work to your advantage – the agency will be able to see the wood from the trees, identifying the key messages that will really help sell your products or services. A good agency will bring you fresh strategic thinking, more effectively reaching your target audiences, and clever creativity, making them sit-up-and take notice.

Before talking with a marketing agency, insist on seeing examples of their previous work and its measurable results.