Local Businesses can beat a recession

All too often when the economy slows, companies slash their advertising and marketing budgets, figuring they’ll wait until the economy rebounds to start things up again.

This mind-set defies logic and ignores data.

If fewer companies are advertising, your name and message stand out more, delivering a clearer message. With less competition and clutter in the marketplace, you can expect higher sales both during and after a recession.

Refuse the recession!

Think about commercial fishing crews and how they operate. They don’t plop down on the dock and use fishing poles just because boat fuel, bait and nets cost too much: “Yep, I reckon if we sit here long enough, prices will come down. In the meantime, let’s just sit here and wait for those fish to come find us.”

An overly simplistic analogy? Of course. But it clearly illustrates a fundamental truth in marketing: Companies that maintain or increase their advertising spending during recessions grow substantially more than those that don’t — and there is data to support this premise.

A 1974-75 study done by McGraw-Hill Cos. Inc. discovered that firms that maintained or increased advertising during recessions experienced a 256 percent spike in sales compared with companies that cut their ad budgets.

Companies that maintain or increase their advertising spending during recessions grow substantially more than those that don’t.

A follow-up study, of the 1981-82 economic downturn, had similar results: Those advertising during the recession enjoyed a 275 percent increase in sales during the subsequent five-year period.

Harvard Business Review found that companies that increased their advertising during the 1974-75 period enjoyed increased sales and market share, while those that cut promotions lost both.

A MarketSense LLC study of the 1989-91 recession also showed substantial gains for brands that increased advertising.

A recent Ad-ology Research study showed nearly half of those surveyed perceived a decrease in advertising as an indication that a company was struggling.

There are even more studies saying essentially the same thing, but you don’t need data-heavy reports to back up what is purely logical thought.

Bryan Kokish August 2009

 

 

 
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