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Why Cutting Marketing During Hard Times is a “No-No”

September 3, 2012

There was a study done by McGraw-Hill Research that analyzed 600 companies from 1980-1985. Those businesses that maintained or even increased their marketing budget through the 1981-1982 recession averaged significantly higher sales growth not only through the recession but for the 3 years after. By 1985 the businesses that maintained or increased their marketing budget had sales that were 256% higher than those who decreased or eliminated their marketing budget.


So, the economy has been in trouble. For awhile. As a business owner, you may have started to panic. Which employee are you going to cut first? How are you going to pay the landlord the money you owe on the lease next month? What about your clients? These are all questions that many business owners are facing.

The first thing that most businesses will want to cut back on when it comes to budgeting is their marketing. However, nothing could be worse if you’re trying to save your business. According to an article published in the Harvard Business Review earlier this year:

It is well documented that brands that increase (marketing) during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.

There is no better time to take advantage of your niche market than in an economic downturn. Because most people are quick to cut marketing, this creates the perfect opportunity as well as advantage for you to continue to pound your message home to prospective customers. In notes he took during a Sequoia meeting, Lance Weatherby, a technology entrepreneur, noted Doug Leone as having said:

In a downturn, aggressive PR and Communications strategy is key.

The Time is Now! 5 Things to Keep in Mind

Mental When it comes to helping your business stay afloat, keep a cool mental attitude. It is usually when people start to “freak out” and panic that poor decisions are made which can affect the entire company.

Marketing-Do NOT cut your marketing no matter what; leave that to the poor judgment of your competitors! Instead, look at various ways and plans for implementing even better marketing strategies through the uses of things such as viral marketing, email marketing, web site redesign, etc.

Money– During an economic crisis, everyone is worried about money-especially if they are a small business owner. This is why it is even more important to always be aware of what your budget constraints are. Too often, budding businesses ‘jump the gun’ and act as if they are a big business when they aren’t. For example, instead of rushing into that bigger office space, take a look at how much you’re spending on other things already. Will the move end up costing you more than it’s worse?

Model– What is your business model? How many employees do you currently have working for you and what are their respective roles within the company? What are your short and long-term goals for the company? Do you have a plan of action in case the economy takes a dive? Do you have contracts in place with your clients?

Method-When you are a business owner, there should always be a method to the madness. Staying organized and upbeat will not only help you; it will also help your employees to do the same as well. State clearly what you expect out of each of your employees in writing when they are hired. Have company policies and let employees know what the termination policy is should they do something out of character or should the economy negatively affect your business. Avoid micromanaging, as this could hurt company morale and the quality of the work put out by employees.

One Comment leave one →
  1. September 5, 2012 10:42 am

    Great post and I really love your blog! Marketing definitely should not be cut during tough times.. in fact more emphasis and time should be spent on marketing in an effort to boost sales. thanks for a great post!

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