At the time of writing, the Bank of England has warned of a recession as a result of the highest interest rates in twenty-seven years.
Such news brings concern for business owners across the UK and many are already reviewing their spending, trying to find ways of cutting costs. Unfortunately, marketing is usually one of the first departments to suffer. It’s often incorrectly classed as an unnecessary expense since it can’t always be linked directly to revenue growth.
That misconception hasn’t been helped by a recent government initiative encouraging businesses to divert their marketing budgets into cutting their prices in exchange for their company name and logo on the GOV campaign art.
As a marketer, I found the campaign infuriating. Governments should come up with some policies that will make a difference to the businesses and individuals affected by the possibility of a recession instead of wasting time on a campaign that will likely have no benefit for SMEs at all.
If you’re tempted to start slashing your marketing budget this quarter, here’s why you might want to reconsider.
Without marketing, your business doesn’t have a story.
Marketing is so much more than supporting the sales department. It's your brand's story, it's how you speak to your customers. If you decide to scale back your marketing then you’re losing out on a massive opportunity to connect with people emotionally and build brand loyalty. No story, no trust, no customers.
Instead, use your brand’s voice to show empathy toward what’s going on in the world. Create meaning from the conversations you’re having and nurture that connection with your audience. It’s a slow and steady process, but your business will benefit in the long run.
Your customers won’t be able to see you.
When you reduce your marketing spend, you're reducing the number of times your customers see you. Even if your target audience is reducing their spending as a result of financial hardship, it pays to keep your name in front of them ready for when circumstances change again.
Stay in the frame by sharing useful content that your audience finds helpful: guides, best practices, tips etc. so that you’re still adding value to their experience even when they’re not buying anything from you. Again, these little touches build trust and loyalty with your customers.
Your competitors will swoop in to fill the gap.
If you cut your marketing spend but your competitors don't, you're giving them the perfect opportunity to swoop in - it’s easy to be overshadowed when your online (and offline) presence is nonexistent.
Little visibility also gives the impression of a lack of stability; if you're suddenly inactive on social and your email campaigns have stopped being sent, your customers are going to wonder why you've disappeared. That’s another opportunity for your competitors to step in and pick up their interests.
Your bottom line won’t benefit from marketing cuts.
Most importantly, cutting back on marketing activity will result in difficulty attracting new customers due to a loss of credibility. Although a recession can affect overall profitability, there’s no evidence to suggest that cutting your marketing budget has ever increased profitability.
Chron confirms that businesses that continue with their marketing strategies during times of economic downturn outperform companies that cut back on marketing.
Take Disney, for example. VisitorQueue points out that Walt and Roy Disney created their first short animated picture in 1928 and incorporated it in 1929 - just as the Great Depression was starting. The Disneys knew people needed entertainment then more than ever, so they began working on their first full-length animated feature, Snow White and the Seven Dwarves, which would go on to kickstart their amazing success.
In short, cutting your marketing spend in times of adversity will be detrimental to your business. If you’re worried about the possibility of a recession, get more intentional with your marketing strategy, channels and tools. Review what’s worked for you in the past and which activities see the most return on investment. Use it as an opportunity to connect with your audience in a way that builds meaningful connections.
