STOP THE PRESS…. Marketing agency encourages businesses to spend on marketing! We know this is hardly a surprise, after all we make a living from our clients spending money on marketing BUT… hear us out. Even though the economy is suffering businesses should not pull the plug on marketing spend… here is why:
Statistic: A study by the Harvard Business Review found that companies that increased their marketing spending during the 2008 recession grew their revenue by an average of 4.5% in the first two years of the recovery, while companies that cut their marketing spending saw their revenue decline by an average of 2.1%.
So, what are the reasons for this and why should businesses look to maintain (or even increase) their marketing activity during economic downturns:
- Stay visible to potential customers
When the economy is tough, consumers are more selective about where they spend their money. This means that it’s more important than ever for local businesses to stay visible and top-of-mind with potential customers. Marketing can help businesses do this by reaching their target audience through a variety of channels, such as social media, email marketing, and local advertising.
- Gain market share
While many businesses are cutting back on their marketing, those that continue to invest can gain a competitive advantage. When there is less competition for consumers’ attention, businesses have a greater opportunity to win new customers and grow their market share.
Statistic: A study by McKinsey & Company found that companies that increased their marketing spending during the 2008 recession grew their market share by an average of 11%, while companies that cut their marketing spending lost an average of 8% market share.
- Build customer loyalty
During an economic downturn, you must keep your existing customers happy. Marketing can help businesses do this by providing customers with valuable content and offers, and by engaging with them on social media and other channels.
Statistic: According to a study by Bain & Company, it costs five times more to acquire a new customer than it does to retain an existing one.
- Position your business for growth
While the economy may be down in the short term, it will eventually recover. Businesses that invest in marketing during an economic downturn will be in a better position to capitalise on the upturn. By continuing to market their products or services, businesses can stay top-of-mind with potential customers and generate a pipeline of leads that can be converted into sales when the economy improves.
Of course, spending for the sake of spending is never a good idea. All marketing activity should be aligned with your own business objectives and should be closely monitored with accurate reporting. It is also important to be selective with your channels, not all marketing channels are created equal. Some channels, such as social media and email marketing, can be very cost-effective. Other channels, such as traditional advertising, can be more expensive. It’s important to choose the marketing channels that are most effective for reaching your target audience and that fit within your budget.
At Clicksmith, we pride ourselves on building bespoke marketing strategies and plans for each and every one of our clients. We are confident we can design a plan for you that will help you hit your objectives. To find out what we can do for you, contact [email protected].
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