South Africa entered a recession in the second quarter of 2018, for the first time since 2009.
Should you cancel your marketing plans, batten down the hatches and ride it out? Or should you beef up your promotional efforts and try to generate as much business as possible? These are questions companies have been asking now and for decades.
Maintaining corporate and product brand recognition should be considered an ongoing business investment. The moment it stops, it begins to lose power immediately, and future sales are in jeopardy. Studies have shown it takes four to six months to see the results of an advertising program. Cutting back during a downturn is like throwing away that investment. Maintenance today costs much less than rebuilding tomorrow.
Advertising should be seen as an investment rather than an expense. It is an investment not only for short-term sales gains, but also for achieving longer term goals and developing brand equity. Strong and consistent advertising reinforces favorable attitudes toward your company and its products.
Data shows there is a direct effect of increasing or decreasing advertising during recessionary periods. The three basic premises are:
- Advertising creates power. Companies that invest more in advertising over a period of years experience faster growth than those that spend less.
- Advertising serves to revitalize. Companies that have increased their advertising budget during a recession have recovered more rapidly than their counterparts that have maintained or reduced advertising.
- Advertising increases the bottom line. Organizations that have continuously increased their advertising investment have enjoyed similar increases in sales.
Here are some strategies that can help a company thrive in a recession economy.
- Develop a strategic marketing plan. Don’t waste money advertising the wrong message in the wrong place and to the wrong audience.
- Increase the advertising budget. If your competitors cut back, your message has the chance to grow stronger.
- Stay in contact with loyal customers. Keep in touch and let them know what you have to offer.
- Product introductions. Introduce well-conceived and properly marketed new products when the competition is weak.
- Sustain awareness. Advertising works cumulatively – remind people frequently about your brand or they’ll forget you.
A recession can help you strengthen the position of your company in your marketplace. Continuing advertising and marketing during a recession may not only be a smart thing to do, it may be a business opportunity you can’t afford to miss.