Ignore The UK Government’s Advice

As reported by the BBC, in these times of increased living costs, the UK Government is urging businesses to pass on as few of their increased operational expenses as possible to their customers.

To help achieve this, “reducing a company’s marketing budget” has been singled out as one way that businesses can reduce operational costs.

In tough times, embarking on a business-wide review and cost-cutting exercise to help save your customers’ money is certainly a wise move. 

However, before you ‘pull the plug’ on your marketing budget, pause for thought.

Undertaking no marketing at all can seriously hinder your current and future sales, your industry positioning and your brand messaging.

As part of your operational review, one should ensure that your marketing initiatives are sensitive to your target audience and their reduced spending power. Consider how you can help and support your customers and continue to add real value as a brand.

Data:

While one cannot predict the economic future with anything approaching 100% certainty, we can safely predict how your customers will respond if you stop your marketing: They. Will. Forget. About. Your. Business.

History and collected data have shown us that drastically reducing marketing spend can massively impact on a business’ sales.

It is well established that it can cost up to five times more to attract a new customer, than it does to retain an existing one. 

In contrast, as recent research by Frederick Reichheld of Bain & Company shows: Increasing customer retention rates by 5% increases profits from 25% to 95%.

Your audience: 

Your customer’s tighter purse-strings may stop them from buying today, but continued marketing will keep you front-of-mind for when your customers once again have the resources to purchase from you – and they’ll also continue to recommend you to others via word-of-mouth.

A recession does not mean less people are interested in your product or service. It just means that customers may not purchase today because they need to be more financially prudent.

In order to ensure continued sales, your business needs to continue marketing. After all, if you don’t market your products how will you let people know they are there to be purchased? 

Advertising:

With every crisis comes opportunity. During a recession, costs for advertising are often reduced, and with other businesses cutting their marketing budgets, you may have an opportunity to further cement your industry positioning and get even more value out of your usual advertising spots – provided your messaging is sensitive to the economic climate.

Positioning:

Marketing also boosts your industry positioning. Undertaking a sustained marketing campaign can be the difference between perceived of as a ‘tired brand’ or an ‘exciting brand’ that wants to grow. 

Summary:

Whether you undertake to produce more promotional products, decide to invest in a giant advertising hoarding that overlooks a busy city centre, launch a super-engaging email marketing campaign or deliver targeted pay-per-click social media ads – whatever you choose to do – make sure you push through the recession with fresh, relevant, sensitive marketing that engages your audience, acknowledges these more frugal times and elegantly promotes your products of services.

Some creativity and a group brainstorm – or indeed seeking external support from a marketing consultant or agency – will enable your team to continue to deliver relevant communications and initiatives throughout a recession, maintaining trust in your brand and reducing the risk of losing your market share.

If you believe that you would benefit from an experienced global business strategist and marketing collaborator, especially during these times of economic uncertainty, please get in touch.