Recessions & Branding: How Marketing Becomes More Important in a Struggling Economy
From Content Manager Michael Luchies
On a scale of 1-10, how worried are you about the current state of the economy?
For many Americans, their level of fear is closer to 10 than 0, and concerns of a recession are at their highest level in years. When a recession is near, companies act similarly to how we act as consumers; we spend less. The first place most small businesses turn to cut costs, unfortunately, is marketing.
There’s an Elephant in the Room
Believe it or not, a recession may be the worst time for your business to reduce or cut marketing efforts. Before diving in, let’s address the elephant in the room. I’m a marketer, and First On Deck is a marketing and design agency. We partner with companies like yours to help you grow your business with marketing.
But the importance of this topic goes beyond our own interests. Whether you work with an external agency like First On Deck Marketing or handle marketing and branding internally, we want you and your business to thrive, and avoid common traps that organizations fall victim to. One of those traps is that marketing budgets should be the first place to look for cuts when times get tough.
Why Marketing Matters More During a Recession
When a recession is near, businesses and consumers take a more cautious approach to making purchases. They “over shop” and conduct more research to find the best price and/or value. This means they are more likely to come across ads, blog posts, and social media accounts. If your company reduces or eliminates marketing efforts during a downturn in the economy, how will leads and sales reflect this change?
Brands that drastically eliminate marketing efforts during recessions disappear in the eyes of their target market. The result is a massive loss in market share while getting replaced by competitors.
Recessions = Opportunity
Recessions are difficult for consumers and companies, but they present a unique opportunity. If we do enter a recession, your company has a chance to increase its market share. This increase can last far beyond the recession, and set your company up for significant growth as the economy recovers.
Whether we’re headed for a recession or not, the importance of marketing your business remains high. While carefully managing your marketing budget becomes paramount during a recession, making drastic cuts or halting marketing efforts will benefit your competitors and make recovering after the recession difficult, if not impossible.
Learn More
- Why Marketing Spend is Even More Important During a Recession (Ad Age)
- How to Market in a Downturn (Harvard Business Review)
