For a lot of companies, 2020 was a difficult year. When hard times hit and budgets get slashed, marketing is often the first thing to go. Many CEOs look at the high cost of advertising and see it as a quick way to make up the deficit.
The problem is, some business owners and number crunchers misunderstand the purpose of marketing. While it is true that marketing is intrinsically tied to sales and revenue, there’s more to it than that. When managers look at their marketing strategy, instead of dollars signs, they should see growth.
Advertising, marketing and public relations efforts work together to keep a brand in the public consciousness. Special promotions and strategic campaigns can lead to immediate profits, but marketing as a collective also lets consumers know who is still here, still innovating, and still ready to meet their needs, no matter the economic climate. Marketing is also tied to other needs of a company, such as SEO, online reviews and thought leadership. In other words–marketing should be viewed as a necessity for long-term, strategic growth, not a pesky line item on a spreadsheet.
That said, the reality of lean times exists for any business. There must be realistic options to cut back and improve the financial health of a company, right? Instead of cutting back on marketing in a crisis, CEOs should have these tools in their arsenal to make up the difference between success and failure.
1. Honest Evaluation
A recession is a tough time to run a business. But underneath the media headlines and internal panic, there is almost always another reason that the company is struggling. Widespread economic hardship tends to highlight the problems that already exist within a business.
It may be time for a thorough, honest evaluation about where the company has been and where it is headed. Are products and services evolving with the times? Is company culture cultivating loyalty and efficiency? Are dollars being wasted on outdated equipment or methods? Is the business model flexible?
It is important to face the reality of how a business is functioning, ideally before times of uncertainty hit, but particularly when difficult decisions are being made. Instead of dipping into the marketing budget, it may be time to pivot and come up with new ways of doing business.
Once the underlying problems are clear, adjustments can help companies better meet consumer needs. At the heart of every successful business is strong differentiation from competitors.
Even the most established brands must constantly find the key ideas that set them apart. After all, just when a business has hit the top of their market, something can come out of left field and turn everything on its head. Top hotel chains likely wished they had devoted more time and energy to addressing consumer needs when AirBnB disrupted the hospitality industry in 2008. In hindsight, Blockbuster Video should have listened to and catered to customers in a different way before Netflix came on the scene.
Listening to customers in a genuine way gives brands a leg up. Clients will say exactly what they need–after that, it’s up to savvy entrepreneurs to fill the niche with valuable products and services.
You read that right–marketing is a tool to be used in a recession, not something to be avoided. On the other hand, doing things the same way they’ve always been done probably won’t get the results a struggling business needs. Instead, use marketing strategically to tell the company story.
A business can pivot and fulfill new needs in new and exciting ways, but without marketing, no one will ever know. Throughout the 2020 pandemic, business owners everywhere found creative ways to adjust and create new services, but the ones who were truly successful found ways to get the word out and draw customers in.
4. New Financial Goals
For most businesses, even severe cutbacks in personnel and marketing budgets aren’t enough to weather a crisis. The answer isn’t cutting costs, it’s increasing profit margins.
It isn’t as hard as it sounds. Even during an economic downturn, there are ways to increase efficiency, hone processes, and find new customers. A little bit of ingenuity and hustle can turn a frustrating situation into an opportunity for growth.
Cutting back on essentials like marketing will only make reaching financial goals harder. When done right, marketing should support financial goals instead of deter them.
Historically, companies who increased their marketing budget during an economic downturn have found enormous success. That’s not to say that spending money with no purpose is a good thing. Marketing, like everything else in business, should be measured and refined to ensure dollars are going in the right direction.
As we move into a new year with new challenges and new goals, these four tools can push companies–no matter their size–towards a brighter future. Evaluating, establishing a strong marketing presence, telling the right story and reaching higher financially are all tried and true ways to thrive when times are tough. This year, don’t take away the resources that drive success, invest in the potential growth that only comes with a strong marketing game.
Stephen Merrill is the COO of Dynamic Blending Specialists, a full service turnkey contract manufacturer dedicated to the success of all clients, no matter their size. As an experienced financial analyst & general manager, Stephen has a demonstrated history of working in the cosmetic & logistic industries.