We’re officially in the first ‘double-dip’ recession since the economic turmoil of 1975 and the longest slump in more than a century. ‘Double dip’ is where the economy goes back into a recession before it has had a chance to recover its previous high of economic output. No arguments there then.
In fact, this downturn has been worse than the Seventies, in terms of the trajectory of the economy, and even more severe than the Great Depression of the 1930s, when GDP recovered its previous high after nearly four years. Reports of a decade long European recession don’t seem that farfetched as we are now in the fifth year of economic misery and our neighbours are falling like flies.
The trouble facing businesses in a double dip recession, or even a triple dip as I heard someone suggest the other day, is that the cuts, redundancies and downsizing have already been made.
In terms of your business, if you resisted cutting your marketing spend when the recession first hit, are you looking at that budget and thinking cuts are now inevitable? If you are, that’s understandable, but resist, resist, resist.
Why? It’s all in the history. Over the years hundreds of studies have been conducted to prove companies should maintain their profile during a recession. In the 1920’s advertising executive Roland S. Vaile tracked 200 companies through the recession of 1923. In 1927 he reported in the Harvard Business Review that the biggest sales increases throughout the period were rung up by companies that advertised the most. After World War II, Buchen Advertising, Inc. decided to plot the sales of a large number of advertisers through successive recessions. When they correlated the figures with sales and profit trends before, during and after the recessions of 1949, 1954, 1958 and 1961, they found that almost without exception sales and profits dropped off at companies that cut back on advertising. Their studies also revealed that after the recessions ended, those companies continued to lag behind the ones that had maintained their advertising budgets. In 1979 another study by ABP/Meldrum & Fewsmith, covering the recession of 1974-75 and post-recession years, found that:
“companies which did not cut advertising expenditures during the recession years experienced higher sales and net income during those two years and the two years following than companies which cut ad budgets in either or both recession years.” *
No one is saying the budget shouldn’t be looked at and refined, but it is the time to establish a strategic marketing plan, if you don’t already have one. History has proven that the strong move forward in a recession and the weak fall backwards.
Here’s a five step plan to get you moving in the right direction:
- Develop a strategic and focused marketing plan.
- Increase your marketing budget.
- Court your existing customers and ensure your brand is strong.
- Remember the power of PR.
- Make sure you are heard, liked and remembered.
Marketing now comes in many shapes and sizes and there is a marketing campaign for every budget. In addition, and unlike in previous recessions, your marketing proposal has a whole new array of tools at its disposal. Despite having been around during the last recession in the 1990s, the Internet is in a much stronger position to assist. And for the first time, social media has a huge role to play in communicating with existing and potential clients, reassuring them of your continued quality and service. Any promotional offers can also be communicated this way and the medium enables you to reach an audience of infinite proportions. It all comes back to the strength of your marketing proposal.