In times of economic crisis, it is always very tempting to cut Marketing spending as it seems that it is the department where it is the easiest to cut spending. One of the main reasons for this is that Management is often looking for more accountability from Marketing. It is always very hard for a Marketing department to show why they are needed when sales are decreasing. Cutting Marketing spending in an Economic Crisis can however be one of the biggest mistakes a company can do.
Companies should instead focus on the following 4 Strategies:
1. Highlight the value of your product or service instead of cutting the price
The value of your product or service should be reinstated and your message should be refined. Do some research to understand competitors’ positioning and how your target market perceives the economic crisis.
2. Know which segments NOT to target
Identify which segments of your potential customers need to be targeted and which segments do not need to be targeted. Some customers are more expensive to keep than to loose. The focus should be on which segments will bring the highest Return on Investment.
3. Differentiate yourself from the crowd
Differentiate by innovating and showing why your product or service is performing in times of economic crisis.
4. Keep building your brand
Make sure that you invest in brand building as part of your marketing plan. This will greatly help you to be in position to compete when the economy recovers.
The key for Marketing Departments is to be able to support the short term so that companies come stronger when the crisis ends. Cutting Marketing spending in a downturn is clearly a big mistake and companies that do it will realize it when it is too late.
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