It’s widely known among business owners that you must market more aggressively during recessions. Buyers are more reserved in their spending, and you simply have to work harder to get the same dollar that they easily gave not long ago.
In fact studies have proven that in every recession (dating back to at least the early 1970’s) that the most successful firms increase their marketing investment during recessions…
In the 1970 Recession: “Sales and profits can be maintained and increased in recession years and immediately following by those who are willing to maintain an aggressive marketing posture according to a study by American Business Press (ABP) and Meldrum & Fewsmith. 1
After the 1974-1975 recession ABP/Meldurm & Fewsmith again found that “Companies which did not cut marketing expenditures experienced higher sales and net income during those two years and the two years following than those companies which cut in either or both recession years.” 2
Studying the 1981-1982 recession, McGraw-Hill Research’s Laboratory of Advertising Performance analyzed the performance of 600 industrial companies during that period. Its results show that “business-to-business firms that maintained or increased their marketing expenditures during the 1981-1982 recession averaged significantly higher sales growth both during the recession and for the following three years than those which eliminated or decreased marketing.” 3
In 1993 Management Review polled AMA member firms about their spending during the 1990-1991 recession. It found that “fortune follows the brave.” Noting that “firms that increased their budgets and took on new people were twice as likely to pick up market share.” 4
Do you have to spend more money to reap these rewards?
In every past recession I believe the answer is yes. The models for marketing in each of the recessions of the last 50 years were built on the idea that you must interrupt your prospects with your advertising message. The media available to you were crude, blunt instruments.
Out of 100,000 viewers of your ad, maybe only 1000 were true prospects—they have a need or desire you can fulfill. But you paid to reach the 1,000 and the 99,000. What a waste of your resources…
Today, you have the ability to laser focus on your best prospects. And with technology, the cost of finding and deeply connecting with your best, most qualified prospects is lower than ever (and in some cases can be done for no money).
So money (or lack of money) should not stop you from aggressively marketing to your best prospects.
Enter the Golden Age of Small Business Marketing
In each of the studies I referenced, the authors use language like “increased expenditure” and “increased budgets.” This reflects the truth of the time, that you needed to spend money to market. I suggest, that the phrase you, as a small business owner, need to embrace is “increased investment in your marketing.”
There are many ways to invest, money is only one. Today, blogs, email marketing and inexpensive direct mail give you the ability to reach your best prospects for almost no money. In fact, you can blog and send emails with some services for free.
The investment then is not money, but time. Your time in creating content, information, that educates your prospects, that entertains them, that serves them.
It’s often said that these technologies are the great equalizers in marketing, and they are…but I’ve never seen anyone explain why. In the past, big business could out spend small business, because they had more money. Small business was at a disadvantage.
Today, content—information—is what is valued by prospects during the buying process. Delivering quality content requires an investment of time. Time to understand the needs of your prospects, time to think and develop ideas and time to create content.
And you, Mr. and Mrs. Small Business Owner, have exactly the same amount of time as your biggest competitor. You win or lose based on the value you create with the time you have…not the amount of money you spend.
But there is no such thing as something for nothing. You must be willing to invest in marketing more aggressively…to pay the price in time or money (or some of both) to reap the reward of increased business.
What will you invest this year to market your business?
- “How Advertising in Recession Periods Affects Sales,” American Business Press, Inc., 1979.
- ABP/Meldrum & Fewsmith study, 1979.
- McGraw-Hill Research. Laboratory of Advertising Performance Report 5262 New York: McGraw-Hill, 1986.
- Greenburg, Eric Rolfe. “Fortune Follows the Brave,” Management Review, January 1993.