First of all the media was full of the credit crunch, then it was economic slow down but now the dreaded ‘r’ word has started to rear it’s ugly head.
Several indicators suggest the UK in 2008 is at least in an economic slow down; house prices are falling, many companies are announcing reduced profits and the figures from the British Retail Consortium suggest that the high street is suffering its worst performance for three years. The work on the iconic two Lumiere towers in Leeds has been put on hold due to the most difficult credit conditions in 30 years.
So what do you do facing a recession? Is it time to pull on the purse strings? Do you take out the hatchet and cut your marketing budgets to save costs? Is this the right thing to do?
The first thing to ask yourself is whether you see your marketing budget as a cost or an investment. The best way to look at it is the latter but you would expect me to say that. However there is evidence to support the case for maintaining or even increasing your marketing spend.
In times of a recession, the market can provide an opportunity for businesses to build a greater share of the market through aggressive advertising without affecting short term profit. On the other hand businesses that reduce media spend suffer a loss of market share.
How can this be, well basically look at it this way. It is something called ‘share of voice’ (the percentage one company has of the total amount of advertising directed to the same target audience). In a recession, it is likely that some companies will reduce their advertising spend, which allows those companies that maintain or increase their spend to steal market share from them.
This suggests that success in a recession is not just about being ‘brave’ and continuing to advertise and invest in your business, but it also requires that at least some of your competitors aren’t so bold and are cutting back. So during the credit squeeze it is inevitable that your pockets might feel a bit deeper, that is why you want a brand and design consultancy that produces outstanding results everytime. Achieving the return on investment you are looking for and getting more for your money.
So when you are reading the headlines over breakfast tomorrow and it’s all ‘economic doom and gloom’ it might be time to get your marketing team together and give us a call on 0113 394 7979 and ease the pressure of the credit squeeze.