Why You Have to Keep Marketing In A Recession

Here's great article posted by Jan Norman, a small business consultant, that outlines exactly why it's so crucial for you to keep marketing during a recession. Keep this information in mind if you have to reduce some of your business expenses, so that you don't end up reducing your revenue at the same time.

Recession Is Most Important Time for Marketing

In the face of a recessionary economy, marketing budgets tend to suffer. Small businesses typically allocate marketing dollars according to available revenue, which naturally slacks during periods of economic decline, says Ray Benedicktus, assistant professor of marketing at California State University, Fullerton.

However, marketing activities are the primary determinant of that revenue, so a substantive reduction in marketing logically inhibits the business’ ability to generate sales at one of the most crucial point in its existence, he says.

To weather this storm, top companies will maintain spending or at least find ways to make smaller marketing budgets just as effective, says Benedicktus, who is a former SBA consultant who has advised more than 100 small companies. Overall, small businesses can do a few things to hedge against consumers’ recessionary behavior.

Know thy customer: It is essential that firms discover how their customers are identifying value, searching for purchase alternatives, and/or changing their spending habits.

With fewer dollars in their pockets and more informative search technologies at their disposal, customers are searching for the best value. Research gives us the knowledge to make good decisions, so let’s find out what’s important to our customers now and deliver it, he says.
Research is not cheap, but the good news for Orange County businesses is that there are a couple of great business schools nearby where faculty, business development center staff, MBA students, and student business organizations are itching for interesting projects.

Maintain and communicate high standards: There are many routes to creating and communicating value to customers, but only one route has anything to do with low prices.
Certainly we are more price conscious, even in business purchasing, but none of us goes out searching for a lemon, Benedicktus says. We can also reduce psychological costs, such as uncertainty, by generating business through referrals, monitoring and communicating customer satisfaction levels, and increasing product trial and demonstration opportunities.

Alternatively, a focus on customer benefits like product quality and delivering excellent customer experiences also increases value, he adds. Customers don’t necessarily want to spend less money, but overall, people just want more for the money they do spend.

People make the difference: Marketing is a group of activities that consists of products, promotions, pricing and place (distribution) strategies. However, no marketing mix strategy is any good without great people, he says.

Now is the time that businesses should be most concerned with improving their sales teams, hiring customer oriented employees (especially on the front-line), cross-training, and engaging existing employees regarding factors that might be contributing to low morale or less than optimal performance.

Maintain marketing: As your competitors cut their marketing budgets and market presence, increase your advertising to gain market share, he says.

Advertising becomes less expensive when fewer businesses are purchasing spots, so deals are out there if you are willing to negotiate with communications providers.

The key is to maintain or increase frequency of ads, and for goodness sake, differentiate yourself by not saying things like “in these difficult times.”

To read the original article, click here.