by Marjorie Steele, Editor for IQS
It makes sense: when budgets are tight, surplus spending gets cut. These “surplus spending” cuts often include a company’s marketing and advertising efforts.
This is what marketing gurus call a “big mistake”.
Research and statistics spanning nearly a century of economic highs and lows show that the companies which scale back advertising efforts in order to cut costs during a recession end up losing more ground than they would have otherwise – why? Because while those companies were scaling back their marketing, other companies took a risk and increased marketing efforts. The result? The companies that cut out marketing to trim their budgets lost consumer visibility during a time when they needed it the most, while companies that increased advertising during an economic slump picked up that slack, maintaining and even increasing sales. Increasing advertising while competitors are cutting back can improve your market share significantly. Kellogg is a famous example of a brand that brought itself into the industry spotlight by advertising through a recession. Post cereals cut advertising budgets during the Great Depression in the early 1930’s, and by the time the economy had picked back up, underdog Kellogg was king of cereal.
(Read more examples of how companies in the past have increased profits during economic recession here)
So…should businesses rush to spend on advertising to beat the economic slump? In light of our current economy, that’s probably a bad idea. Dollars thrown at unfocused or ineffective marketing strategies are, in this economy, dollars you’ll probably never see again. So how should businesses continue spending in advertising without throwing away scarce profits?
The key is to find the right marketing strategy for your business – marketing in the right place to the right audience. Prada may find it useful to place full-page picture ads in popular magazines, but a hydraulic press manufacturer needs to find a more industry-specific strategy. There’s an adage here at IQS: “marketing is bringing a consumer to you when they are ready to buy.” That’s why business-to-business marketing often focuses on web marketing. Even in an economic recession, the problem is not that people are no longer buying hydraulic presses, parts washers or stainless steel plate; the problem is that those consumers are becoming harder to find. Budget cuts can mean fewer allocations for trade show travel expenses, so where do many would-be consumers go to find the parts they need instead? You guessed it! The internet. Spending doesn’t disappear in a recession, but it does shift, and right now it’s shifting to the world wide web. If you don’t think anyone is googling “stainless steel plate”, or whatever equipment it is you sell, try getting some web tracking for your homepage – you’d be surprised to see who all is looking for you! Web tracking is also great because it creates a very easy way for you to measure your return on investment for the money you spend on web marketing.
Simply having a website isn’t enough, though. Web marketing is all about making it easier for potential customers and suppliers to find each other, as I discussed in my earlier entry on “Web Marketing Baby Steps for Industrial Manufacturers”. Taking out listings in online directories can be a great way to boost website traffic with a minimal amount of effort, but there are many other web marketing solutions which should be considered as well; SEO, Google Adwords, sponsorships and pay-per-click or pay-per-action programs can be effective in bringing clients to your virtual doorstep. Rick Brown had some great suggestions in his entry last week, “Algorithmic Business”, on ways to streamline communication between you and potential customers using simple website tools like “Request a Quote” forms.
But, as Rick also mentioned, having the technology in place is not always enough. If you’re paying for a web marketing specialist to boost your website traffic but make it difficult for customers to reach a sales rep or engineer over the phone, you’ve spent money bringing customers to your site for nothing. Part of increasing advertising efforts is increasing customer service and streamlining business so that old customers keep coming back and new customers build a trusting relationship.
If you’d like a few more specifics on business-to-business marketing in today’s economic climate, try this article on “7 Strategies for B2B Marketing During a Recession”. Just remember: take a bold step forward while others are tightening their belts. If you do, you may find your belt fits you just fine.