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Businesses are self-destructing when they cut back on marketing in downturns. If evaluated and implemented properly, marketing creates a return on investment in multiple ways.

More on that later. Meantime, suffice to say downturns or not, a good marketing approach requires intensity and is based on thought leadership about every facet from social media to internal company communications. And marketing, of course, includes strong public relations.

If anything, maintain your marketing investment and expand your PR efforts.

Sports provide great metaphors for business. As in any sport, remember this basic principle: Write a great game plan using marketing plan essentials, test your ideas and then attack…attack…attack.

An award-winning public relations expert asserts it’s unproductive to stop or trim marketing during a recession.

Devon Blaine

“Though this strategy might seem to make common sense, recessions are times that call for uncommon business wisdom,” says Ms. Devon Blaine, president and CEO of the The Blaine Group, Inc. in Beverly Hills. “Recessions reward the aggressive marketer and penalize the timid one.”

In other words, timorous businesses forego opportunities for niche leadership and to expand their market share.

Authoritative Study

Ms. Blaine cited a noteworthy study, “Advertising & Marketing During An Economic Downturn,” by David Stanley of Industrial Equipment News. It analyzed the situations of more than 1,000 manufacturers in what’s called “Profit Impact of Market Strategy” (PIMS).

Far too often, studies appear to be self-serving for special interests. But this study is objective and unique. It’s from The Strategic Planning Institute in Cambridge, MA, which describes itself as a non-profit membership association that promotes “strategic business management.”

Actually, The Strategic Planning Institute originated as an internal planning project at General Electric. Then, from 1972 to 1974, it evolved into a Harvard Business School project.

The PIMS study concluded that bold marketing in a downturn resulted in strong performance while tepid marketing had undesirable consequences. In addition, the higher marketing investments did not hurt profits for the short-term.

1990’s lessons

“Penton Research Services reports that shortly after the 1990-91 recession, Coopers & Lybrand, in conjunction with Business Science International, surveyed CEOs from growth companies about the effect the recession had on their profit growth and the actions they had taken in response,” cited Ms. Blaine.

So what were the conclusions from the second study?

“A strong marketing program enables a firm to solidify its customer base, take business away from less aggressive competitors, and position itself for future growth during the recovery,” she concluded.

Again, I agree with Ms. Blaine. Having experienced five major economic downturns in my career, I know there is one inescapable fact about marketing and recessions. Companies that view marketing strictly as an expense and not an investment miss opportunities for growth. Successful companies look at the short and long-term ramifications.

During downturns, good companies that cut marketing budgets soon learn they do not retain dominance in their marketplace, and they will learn they have lost market share once the upturn begins.

My thanks to Ms. Blaine for contributing her expertise.

(Disclosure: Ms. Blaine is a talented friend who was named the southern California publicist of year for her work in professional PR and crisis intervention. We have also been members of Consultants West, a roundtable of veteran consultants in Los Angeles.)

From the Coach’s Corner: Not to be redundant and to add to Ms. Blaine’s astute points, here are five lessons I’ve learned about marketing and recessions:

  1. A quality company that maintains stellar marketing in a recession succeeds. But it is imperative in the worst of conditions to continually evaluate the company’s marketing return on investment.
  2. If a company does not provide enough value or is a substandard company, marketing does not help them.
  3. An economic downturn is a terrific opportunity to take a big picture snapshot of a company. It is important to look a client’s total situation – such as in human resources or pricing – and come up with solutions.
  4. The best companies are proactive about planning and execution in good times and bad. Many companies show poor judgment about pricing and cost-cutting in marketing. Automatically slashing prices without assessing the competitive landscape can undermine your brand’s value, and make it difficult to successfully raise prices later.
  5. Companies that cut marketing investments fail to sustain their “Top-of-the Mind Awareness” and unnecessarily lose revenue in the recessions, and they endanger their profitability when economic conditions improve. Indeed, it takes more resources – time, energy and money – because they have to work too hard just to re-establish their brand.

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“Unless we change direction, we are likely to end up where we are headed.”

– Chinese proverb


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.