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With a projected recession on the horizon, many businesses have been forced to re-think their marketing and sales budget. But, is decreasing your marketing and sales budgets to save money always the way to go? Or is there a way to get the most of your marketing so you actually make more money during a recession?
Let’s see what the experts suggest when it comes to keeping your business afloat while keeping your marketing strategy intact.
Business owners are often inclined to cut their marketing budgets during a recession. This is because they often have less money coming in, but the bills still need to be paid. Since sales might have dropped, the idea is that cutting marketing costs will provide that money they need to stay in business.
But the question is – Why cut your marketing budget during a recession ahead of other expenses? Doesn’t it make sense to invest more in your marketing in order to attract more customers?
Well, many businesses take this route because they consider marketing to be secondary to what they regularly offer. Marketing is often taken for granted when business is booming and is seen as an unnecessary expense when business is stagnant.
At the same time, a temporary halt in marketing doesn’t necessarily mean a business will lose all of their social media followers or loyal customers. They have some wiggle room, so marketing may not seem like an immediate need.
Despite these reasons, decreasing one’s marketing budget during a recession should only be a temporary solution. As eventually the business will need new customers coming in and existing customers might forget that the brand is still in business. With this in mind, a recession might actually be the ideal time to market your business in order to stay afloat.
While an economic downturn can certainly affect a business’s profitability, there actually hasn’t been evidence to show that cutting one’s marketing budget has increased profitability.
According to marketing expert Stephen King, “Businesses that cut their advertising expenditures in a recessionary period lose no less in terms of profitability. Than those who actually increase spending by an average of 10 percent”. In fact, companies that increased spending actually saw 4.3% in profit compared to those that cut spending (0.8% increase).
If you’re tempted to cut your marketing or sales budgets, consider that you may, in fact, be hurting your business more than you are helping it. Or at least losing out on more opportunities.
Several studies actually suggest that increasing marketing during a recession can lead to growth. They indicate that when companies continue to market themselves during a recession. They keep their brand in the minds of consumers. So, when customers do have money to spend, they’re likely to turn to these brands because they are still fresh in their minds.
The takeaway? That there is more evidence to suggest that increasing your marketing during a recession leads to business growth and profitability. Compared to cutting your marketing spend.
If your concern is keeping your business afloat (or even thriving) during a recession, then maybe your marketing shouldn’t be the first to go.
“Whenever you find yourself on the side of the majority, it is time to pause and reflect”. -Mark Twain
Similarly, you don’t want to decrease your sales budget during a recession. This is because your sales team helps you turn those leads (generated by your marketing campaigns) into paying customers. You still need to have a system in place to convert these leads. So, you can get the highest ROI possible.
Consider auditing your sales processes to find potential bottlenecks. What tools could increase your team’s efficiency? Could any of the steps be automated? What about a step-by-step process for reps to follow?
Again, your goal is to get the best results possible by working smarter, not harder. Getting more sales and customers doesn’t always mean blowing through your budget and throwing more money at the problem; instead, increase efficiency and productivity where you can to increase your conversion rate.
Advertising your business during a recession is very different from marketing your business while the economy is thriving. Consumers might have limited budgets or different priorities; they might be more inclined to buy necessities over non-essentials.
In what ways could you pivot your marketing to reach more customers during this time?
Your business’ website is one of the best assets you have during a recession. This is because you can channel traffic from a variety of platforms, while maintaining a strict budget during a recession.
As long as your website is generating traffic, that traffic should be working for you. That’s why you should utilize website tracking tools to turn website visitors into leads and, eventually, loyal customers.
With your 14-day free trial of Visitor Queue, you can track who visits your website to follow up with them. That way, your sales pipeline stays full while you’re able to get the best ROI on your marketing spend. Plus, it’s a great way to help increase your sales, therefore your budget during a recession!