The coronavirus pandemic threatens to plunge us into the recession to beat all recessions and is completely unlike anything we have ever seen. And when sales are plummeting (or at a complete standstill), it is natural to panic.
In such a tough environment it is understandable that many businesses feel the need to reduce or stop their advertising spend. However, history shows us that those businesses that thrive during and after a recession are those that sustain, and even increase, their marketing.
Studies of recessions over the last 100 years have shown that slashing advertising spend is a definite way to create a serious problem down the line. A study in 2002 analyzed the effect of advertising on sales over a six year period during the recession of 1990-91 and concluded that the group of companies who maintained or increased ad spend had a higher sales growth in future years than those that had decreased it.*
Unfortunately there are currently businesses who have to remain in lockdown, such as our pubs and restaurants, and their advertising expenditure must be capped, but there are many businesses that are now wholly or partly open and for whom a return to ‘business as usual’ is critical for them to survive.
Continuing to market to your customers so that they keep your business in mind, will ensure a better outcome once things start to return to normal.
Hold your nerve and dig deeper
Advertising in tough economic times makes good business sense.
Firstly, the market is smaller and your business will find it easier to get noticed. When competitors stop all marketing activity, it is an opportunity for you to increase your share of the market. And secondly, potential customers are more likely to remember your business when everyone else re-starts their marketing campaigns.
Advertising during a crisis is not about sales today, it is about thinking long-term and creating opportunities for the future. Spending money on advertising at this time is critical for survival.
Advertising during a crisis is not about sales today, it is about thinking long-term and creating opportunities for the future
How to market now – be thoughtful
Businesses need to find ways to be relevant. Trading on fear or a hard sell strategy would be insensitive when times are uncertain and people are scared. You need your business to be seen as reliable, confident and trustworthy.
New customers will be keen to work with local, friendly services so ensure your message is warm, reassuring and helpful. They will also want to know which businesses are still open and providing services and products locally.
The coming months will test all businesses but if we hold our nerve and work hard on bringing in new customers, our bounce back and recovery should happen.
Worried about how to get your message to potential new customers?
We offer both print and online solutions to help you connect with your customers. Whether you need print advertising, leaflets and promotional materials or an online presence, give us a call to see how we can help.
*Kamber, T. The brand manager’s dilemma: Understanding how advertising expenditures affect sales growth during a recession. J Brand Manag 10, 106–120 (2002).