History has shown that during a recession, the first thing that many companies do is cut back on their advertising. This is a critical mistake. Customers don’t stop spending during a tough economy. Instead, they become more selective when it comes to looking for value before making a purchase. When in this extremely choosy mindset, customers feel most comfortable buying from a company that they know and trust. During this pivotal time, it is imperative that your business retain front of mind awareness.
Several research studies have shown that both sales and profits decrease for businesses that cut back their advertising during a recession. Even more interestingly, once the economy lifts, those that have cut back on advertising have a delayed turn around in regard to sales and profits.
A study of the 1970 recession by ABP/Meldrum & Fewsmith demonstrates that “sales and profits can be maintained and increased in recession years and in the years immediately following by those who are willing to maintain an aggressive marketing posture, while others adopt the philosophy of cutting back on promotional efforts when sales appear to be harder to get.” This is just one study out of many that all make the same important point: decreased spending on advertising equates to decreased sales, which become lower than the amount of money saved through cutting back on advertising expenditures. Pair that with the longer turnaround time to bounce back to pre-recession success and you have a recipe for disaster.
Learn from the past and take advantage of this opportunity to gain market share through maintaining or increasing your advertising investment. There are a multitude of opportunities for businesses that are forward-thinking and ready to invest in their future. Seize this golden opportunity in this “buyer’s market” and enjoy the benefits of aggressive media pricing to get much, much more for your money.
