The current economic climate is one that is fraught with dramatic instances of sharp increases in costs of goods, from raw materials and supply, to agricultural product, to gas and consumer products.
In the US, we have weathered such storms before – but still, the show must go on. And in this case, marketing and promotions are truly more important than ever. In a dark economy, the kneejerk reaction is to cut marketing budgets.
During economic crises, consumer fear increases and their need for reassurance does as well. This means that if a business cowers under pressure and ceases marketing activities, their patronage will fear eventual closure and believe (often erroneously) that the quality of product and service in that business has plummeted. The result? That customer seeks to patronize the competition.
According to an article in Forbes (“When A Recession Comes, Don’t Stop Advertising” by independent media consultant Brad Adgate, September 5, 2019), during the last recession (2008), spending on advertising in the US declined precipitously by 13%. Adgate points out that numerous studies performed throughout the past century verify that during such times, there are several advantages of not only maintaining but even increasing marketing spends during a weakened economy. Businesses that maintained or increased marketing and ad spending have enjoyed increased sales and market share not only during recessionary times but afterward.
One example he provided: During the recession of the early 1990s when McDonald’s cleaved its promotion budget, competitors Taco Bell and Pizza Hut both accelerated their marketing to take advantage. The results: Taco Bell sales inclined 40%, and Pizza Hut enjoyed a larger slice of 61% sales increase while Mcdonald’s took a 28% hit.
In her blog on July 26, 2016, “Why Marketing Budgets Are Cut First But Shouldn’t Be,” Kelsey Skager of Quality Logo Products points out that in tough times, marketing budgets tend to be cut first as they are mistakenly viewed as non-essential costs. But when the marketing is reduced or ceases altogether, so does the active communication between the business and its clientele or customers. So – marketing is indeed an essential cost.
Skager writes, “There are tons of people out there who are searching for what you are selling. Even though they may not have the funds to purchase from you right now, you still want them to be able to find your product or service. This will keep you top-of-mind for when they do have the resources to purchase from you, and they’ll likely recommend you to others who are looking for what you sell. In addition, think of all your competitors out there who are being reactive to their situation and stopping all advertising. If you’re advertising and they aren’t, you’re going to be the first choice when your customers are able to purchase from you again.”
Adgate presented several factors that support the validity of marketing and promotions during tough economic times. The “noise level” decreases substantially when competitor businesses eliminate or reduce their marketing, allowing your client to stand out more clearly and strongly. “When marketers cut back on their ad spending, the brand loses its ‘share of mind’ with consumers, with the potential of losing current – and possibly future – sales. An increase in ‘share of voice’ typically leads to an increase in ‘share of market.’ An increase in market share results, with an increase in profits.”
You may likely have many skittish clients across industries and types (education, healthcare, municipal, etc.). But you can make a compelling case to incorporate budget-friendly promotions that collectively will deliver the message that your client is doing well.
A powerful quote you can use is attributable to the founder of Walmart. Sam Walton declared that when he was asked about the recession, he “thought about it and decided not to take part.”
And here’s where your professional services truly shine. Persuading your customers to continue to use promotional products is half the battle, but selecting the promotion is also rather easy because it is the simple thought of handing something to customers for free is more appreciated during economic hardships.
For example, your retail clients can give Bel Promo’s Budget Non-Woven Shopper Totes, imprintID’s Budget Non-Woven Polypolylene totes, or IDProductsource’s Thrifter Budget Non-Woven Shopper Tote, vets and pet retailers can give Promopet’s Folding Lint Brush, schools and PTOs can sell PMGOA’s Budget Backpack, Alphabroder’s Backpack on a Budget, Prime Line’s Basic Budget Backpack, Wonderful Thinker’s Budget Backpack or Sweda Company’s Budget Backpack. Healthcare providers can give patients Raining Rose’s Budget Balm, and any client celebrating a “business birthday” on-site can give its patrons free Budget Travel Kits from Prime Line that include gloves, mask, 2 antiseptic wipes, and a luggage tag.
These are just the tip of the mountain of promotional opportunities in belt-tightening times. There are many ideas and products that won’t gouge your clients’ budgets.
Get positive – your clients and prospects who trust you are inclined to follow the lead you present. Grant Cardone, CEO of Cardone Acquisitions likes to assert, “A recession is a terrible thing to waste, so make the most of it.”