Over recent weeks, life as we know it has changed in ways we couldn’t have previously imagined. The world is in large parts in lockdown to help stop the spread of Coronavirus, and we are only just starting to get a grasp of what the long-term consequences will be for the local and global economy. And there’s no doubt about it – this pandemic is likely to have an impact on every single business, regardless of size and industry.
The first instinct when facing difficult times as a business is to look at cutting costs, and the marketing function is often one of the first to go as it’s classed as non-essential. After all, you’d rather pay your staff or keep vital business operations going, than revamp that website you’ve been talking about – we totally get it.
But there are a few good reasons why you shouldn’t completely stop all marketing:
Communication is key
Nurturing existing clients is more important than ever. Your clients are looking to you for advice, support, and guidance in times that see lots of them worried about their livelihoods and families, and you need to fulfill this role. Regular phone calls to check in with your clients and a solid email communication plan will ensure that your clients see you as their trusted advisor who is genuinely (trying to) add value to their position, rather than ‘just’ an outgoing cost.
Chances are you will be so busy looking after your clients in your area of expertise, that you don’t have time to craft and set up an on-brand and effective email communication. We’re not suggesting you engage in overtly promotional sales messages (there’s a time and a place for that) but a caring and sensitive approach to addressing, and ideally solving, your client’s pain points are likely to be well received.
Opportunity to re-position your brand
In every crisis, there are opportunities – opportunities to improve your value proposition, client communications, and your overall agility as a business. Customers will remember how you dealt with them during difficult times. As a professional service firm, you have the expertise and skills to advise your clients on the challenges they are facing, and they are looking for a trusted partner that will be by their side in tough times, as well as good times. Tough times call for innovative and ‘outside the box’ thinking – are there additional services you can offer as a result of changing demand? Are there areas or processes you can streamline internally? Are there particular skills within your team that would warrant offering a niche service, now or in the future? Is there a new target demographic you can focus on?
Marketing efforts can take up to 12 months to show a result
Whilst some online marketing tactics provide quick and easily trackable results, many other tactics require a more long-term approach that helps build your brand awareness organically and over time. Bear in mind that stopping your marketing activities will immediately stop any momentum you may have been getting with your activities so far. Clients will continue to require your services at some point in the near future, albeit potentially in a different form, and when they are ready to start their search for a trusted advisor, you will want to be at the forefront of their minds.
Your competition is cutting back
If you are considering stopping all marketing activities, chances are that your competitors are doing the same. Seize this opportunity to increase your market share. Once you have gone through point 2 (see above) and re-defined your focus, continue with your marketing efforts to communicate with your target audience, offer helpful and timely advice and seek out strategic partnerships that align with your values and marketing objectives. By all means, scale back if you have to – it will be a better investment overall than having to start from scratch again in a year’s time!
If you are finding yourself furloughed or with less client work, why not spend the gained time looking at and refining your marketing strategy? Quite often, business owners and partners get so caught up in the day to day running of their business that they lack the time and headspace to think about the marketing basics, also known as the 7 P’s – Product, Promotion, Price, Place, People, Process, Physical Evidence.
On a final note, here are some examples of companies who didn’t cut back on their marketing during a recession and reaped the benefits as a result:
Kellogg’s: In the 1920’s, Post was the category leader in the ready-to-eat cereal category. During the Great Depression, Post cut back significantly its advertising budget and rival Kellogg’s doubled its advertising spend, investing heavily in radio and introducing a new cereal called Rice Krispies, featuring “Snap,” “Crackle” and “Pop.” Kellogg’s profits grew by 30% and the company became the category leader, a position it has maintained for decades.
Toyota: The 17-month recession of 1973-75 was triggered by the energy crisis. In late 1973, the U.S. government issued its first miles-per-gallon report in which Toyota Corolla was second to Honda Civic in fuel efficiency. Since Toyota was experiencing strong sales, when the economic downturn hit, the temptation was to drop their ad budget, which they resisted. By adhering to its long-term strategy, Toyota surpassed Volkswagen as the top imported carmaker in the U.S. by 1976.
Pizza Hut and Taco Bell: In the 1990-91 recession, Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%.
Amazon: Amazon sales grew by 28% in 2009 during the “great recession.” The tech company continued to innovate with new products during the slumping economy, most notably with new Kindle products which helped to grow market share. In a first, on Christmas Day 2009, Amazon customers bought more e-books than printed books. As a result, in the minds of consumers, Amazon became an innovative company by introducing a lower-cost alternative to cash-strapped consumers.
This recent article by Mark Ritson collates the outcomes of various university studies, conducted at different times of recession over the last century. He sums it up nicely by saying “The optimum response to the recession is to maintain, and ideally increase, your advertising investment.”
*Image from here.
If you’d like to have a chat about your professional service firm’s marketing challenges, please call us on 01903 530787 or email Lara. We offer free 30-minute consultations to share our experience and ideas with professional services firms.