Business in a Time of Crisis
When a crisis hits, businesses panic. The uncertainty and financial stress these unexpected events bring are enough to wreak havoc on even the most grounded companies. Most recently, the COVID pandemic has taken everyone by storm, and companies are strategizing how to keep afloat. During these troubling times, many businesses must make the tough decision to cut their budgets. Unfortunately, one of the first things companies cut is their marketing budget since marketing is considered the “frosting” on the cake. Despite this misconception, cutting your marketing budget in a recession or global pandemic is a costly mistake.
Cutting Marketing Budgets May Hurt Your Business
It may surprise you to know that cutting your marketing budget during a recession is one of the most detrimental things you can do for the long-term success of your business. While it may seem like the right choice temporarily, you are setting up your business to lose market share. The Institute of Practitioners in Advertising found that companies that cut their marketing spend by 50% during a recession or crisis took three years to catch up to their competitors who had not made any slashes to their marketing budgets.
Rather than cutting your budget during a time of crisis, consider maintaining or even increasing your digital marketing. Focus on continuing a consistent level of activity, whether it is via social media or display ads. Visibility and activity project a certain security level to your customers, and continuous exposure to your brand’s message not only reinforces its stability but also helps strengthen brand loyalty among your customers.
Benefits of Maintaining Your Marketing Budget During a Crisis
Here are a few factors to consider before you slash your marketing:
- Market Retention: It’s more cost-effective and downright easier to market to existing customers than trying to target new clients. In the event of a recession or global pandemic, your company may not be in a position to bring in new business. In these instances, you may want to consider reallocating budget money into retention campaigns and initiatives. This doesn’t necessarily have to be an expensive expenditure for creativity tends to go a long way. What better way to ensure your business is booming than by showing your customers how much you value their loyalty?
- Reduced Digital Marketing and Advertising Rates: Unfortunately, economic recessions affect all businesses and industries; the digital marketing sector is no exception. Because of this, you’ll discover reduced digital marketing advertising rates across all platforms. Try and take advantage of discounted prices and deals by utilizing ad space you may not normally have accessed.
- Brand Image Stability and Being Front of Mind: Maintaining or increasing your marketing budget during trying economic times allows your brand to project confidence. When your customers see consistent marketing activity, whether through social media posts, email blasts or display ads, they associate this with stability. This ensures that your customers remember your company when they make purchasing decisions.
How One Well-Known Company Used Marketing During a Crisis to Boost Sales
During the Great Depression of the 1920s, the most popular cereal company in the market was Post. Despite being the leader in its industry, Post decided to cut its marketing spend significantly. On the other hand, cereal rival Kellogg’s saw an opportunity to grow and ultimately doubled their marketing and advertising spend. Kellogg’s also introduced a new, revolutionary product to the marketplace –– Rice Krispies. Because of this decision, Kellogg’s saw a 30% increase in revenue and continues to be the industry leader to this day.
It is vital to think outside the box during times of crisis –– a creative marketing strategy will not only save your business from sinking but can also boost your revenue to unforeseen levels. It is important not to make the same mistake as the company Post did. Don’t hide your visibility during a crisis; instead, highlight the top qualities of your brand by using digital marketing tools to help you stand out from the rest.
Why Choose HexaGroup as Your Account-Based Agency?
Your business can get the increase in market share and revenue that it has sought for so long.
At HexaGroup, we employ a talented team of digital marketers, marketing consultants, copywriters and graphic designers. Our team is more than capable of offering a wide range of complete marketing services that cover everything from brand creation to website design to SEO. If your business is in need of one of our select marketing services, contact us and prepare your company to accelerate its growth.