Last week, I read Richard Earls’s column about pulling out of a slump, and it resonated with me. We all have slumps and must know how to pull out of them. But what happens when the slump is the economy? Currently, in my agency, I am seeing the pent-up demand for travel in a post-COVID world, but the uncertainty in the economy is offsetting it. My clients (single parents) are a different demographic than most, so I am concerned. And I have been through a few financial valleys in my business in the past, and I know that now is NOT the time to pull back on marketing!
In times of economic downturn, it’s easy to take a “belt-tightening” approach by cutting costs. And let’s be honest; marketing is a low-hanging fruit. However, research has shown that increasing marketing spending during a recession can lead to significant benefits for businesses in the short and long term.
Here are some of the reasons why.
- Increased Market Share: During a recession, competitors are likely to cut their marketing spend, providing an opportunity for businesses to increase their marketing spend to capture a larger market share.
- Increased Consumer Confidence: A strong marketing campaign during a recession can help to increase consumer confidence in a business. This can be especially important for travel, which is considered a “luxury” items. By continuing to market, your agency shows stability and reliability to consumers, thereby increasing consumer confidence.
- Improved Customer Retention: By continuing to engage and communicate with customers through marketing efforts, you can maintain loyalty and encourage repeat purchases, if not during difficult economic times, but certainly when times are better.
- Reduced Advertising Cost: In a recession, many ad prices decrease. This can be an excellent opportunity for you to reach more customers or a whole new audience for less money.
- Long-term Growth: Agencies that invest in marketing during a recession are well positioned for growth when the economy recovers. By maintaining or increasing marketing efforts, you continue to build brand awareness and position yourself for growth when the economy improves.
Remember, these downturns are cyclical. Just as we have “up” days and “down” days in our lives, our businesses will also. As Richard said, when we are down, we need to work our way out of the slump. And when the market is down, it is no different for your agency! Now go forth and spend!