In an ideal world, the marketing activity would be self-sufficient, always pay back multiple times what it costs to execute, and be effective in reaching all potential buyers in the appropriate industry at all times. But in the world where the sky is blue, marketing activities are driven by various factors, including perceptions of the company and the primary marketer there, economic forces driving consumer behavior of all kinds, and factors beyond their control.
As a result of these factors, marketing budgets are at the mercy of the company’s reactions to these perceptions. Many of these perceptions are flawed, skewed, marred by history, the personal experiences of top management, and most have no historical precedent or foundation.
Myth No. # 1: “Our brand is strong enough not to need support during the recession.”
Fact: Few brands are strong enough to survive without advertising, product promotion, and customer service support. Brands are like delicate houseplants: they need attention, support, reinforcement and polishing (the commercial equivalent of nutrients, light and water), or they will wither and wilt to a shadow of what they were before. This is not a position you want your corporate brand to be in when the economy’s growth engine picks up again.
Myth No. # 2: “If we cut marketing spending, we can use the money for other things internally and increase the budget when things get better.”
Reality: Studies have shown that once that budget is cut, it takes a Herculean effort and a strong internal champion to push it back to its previous levels, and even if it increases, there are much stronger ROI conditions attached to its implementation. Once those funds are allocated elsewhere, they tend to stay there; after all, that other department doesn’t want to give them up either.
Myth No. 3: “No one is buying anything, advertising and promotions are a waste of money.”
Fact: Many studies by prestigious business journals and university think tanks have reached the same conclusion based on the data they collected on American and, in some cases, global companies: those that are reducing their presence in their key services markets are in a much worse position. in terms of profitability, market share and competitive presence in the market when the recession subsides and profitability growth returns to those who maintain their levels of marketing activity. Those companies that are bold enough to increase marketing activity have a strong chance of taking market share away from their less aggressive competitors and may dominate the category if the recession lasts long enough.
Myth No. 4: “We can reduce [on marketing] now, and then ramp up quickly when things get better. “
Fact: This strategy has proven disastrous time and time again, especially for companies that have inherent inefficiencies in their design or product delivery channel. This inefficiency will not allow them to “increase rapidly”, since due to this same inefficiency they will always be “late” when it comes to measuring the time of the market; They are not market leaders, but laggards and therefore acceleration activity starts late. relative to the buying cycle, and their more agile competitors have already beaten them.
Myth No. 5: “We must examine what is working for us and eliminate everything else.”
Reality: This is not really a myth, but a knee-jerk reaction to a short-term drop in gross sales. Good marketing departments should be doing exactly that in perpetuity, not just when times are the hardest. Why would any worthwhile marketer stick with programs that didn’t work, effectively reducing performance across the board and wasting money?
In addition, there must be metrics built into any campaign so that there is a way to “feel the pulse” of its success, and a correction can be made midway to drive effectiveness and increase ROI on an ongoing basis. In addition, in some channels, there is a cumulative effect that blurs perceptions of what works and what does not: there are interdependencies between channels that are not planned or programmed, but that live in the mind of the customer and trigger sales inadvertently. Eliminating what cannot be accurately measured hampers this effect, dragging down the results for no apparent reason.
Myth No. # 6: “Marketing spends more money than any other department, they have more room to cut the budget.”
Reality: While spending can be a measure of power in some corporate structures, informally at least, performance is really what counts when reviewing the budget. Marketing is one of the few departments that can really pinpoint the contributions they make directly to the bottom line. There is a proven cause-and-effect relationship between gross sales and marketing expenses for larger, enterprise-size companies. Higher IT spending can pay off in the long run, but the best servers typically don’t move more product unless the product is server space. Cutting the marketing budget only reduces the opportunities available to generate market share, increase product awareness and memorability in the mind of the consumer, and reduces long-term profitability.
Myth No. 7: “All of our competitors are cutting advertising and media spending to save money, so we should too.”
Fact: This kind of sheep thinking like a lemming can destroy your business! Your mom knew better than this when you used the excuse “All the other kids are leaving, why can’t I?” and her response was probably something like “If the other kids jump off the bridge, are you going to jump too?” Despite being competitors, their finances are likely to look a little different than yours, and it’s silly to think that you can mirror their moves and be successful, at best you will be the same! The smart money here is being used to take market share away from its more timid competitors, increasing presence and exposure, and cutting other less mission-critical expenses for a short time to do so.
Cousin!
Myth No. # 8: “We should downgrade the quality of our marketing materials, use a cheaper creative agency, and mail less often to save money.”
Reality: This set of moves will actually cost you both in the short and long term. You can save a very small incremental amount on cheaper paper, shorter and smaller brochures, cheaper brochures, smaller trade show giveaways, but the damage you are doing to your brand and the resulting poor image on the company in your The set does much more damage than can be repaired by spending those few dollars later to try to fix it.
Not to mention shaking the trust of your customers by giving them a visual representation of how poorly your company is performing! “Wow, they must be in trouble, this looks like cheap junk. Maybe I better take my business to the other company that is likely to be around to support their products in the future,” is the idea that he is promoting by reducing quality in his materials. published publicly.
A good design often costs less than a bad design, due to fewer creative iterations, fewer errors, higher effectiveness, and higher returns. Skipping the agency boat you’re with if they’re handing over the spent dollars just to save a little money is silly. The acceleration time for a new agency to learn about your needs, your products, your style, and your brand will almost run out when the average recession ends, and it will have cost you more to achieve the same level of productivity. at that time, just in time to reposition itself to the new economic conditions.
When times get tough, tough guys kick in in the marketing department, providing the market with visual evidence of your corporate strength, your industry leadership role, your market experience and the supportive force you offer to your products and services. Don’t believe naysayers who want to cut your marketing budget, reduce your staff, and reduce the quality of your materials. Everything you do here reflects the health of your business, and cutting here shows more and less help.