The economy is facing a decline in growth and business is negatively impacted. Sales are declining and the first thing that comes to your mind is to do a budget cut. Before you get carried away with the numbers game, take a step back and refrain from making rash decisions that may cause more harm in the long run. We understand that the natural instinct is to stop spending. But will cutting marketing dollars really help your business turnover profits? This short-term strategy is akin to putting a band-aid over a stab wound – it’s never going to work. Here are the reasons why you should not jump the gun and cut marketing spending, and sure-fire tactics on how you can improve your marketing returns.
Cutting marketing dollars during economic downturns has proven to be detrimental to revenue generation
Yes, you read that right. Marketing, although an expense account, is one of the last areas to consider for budget cuts, mainly because it is an investment expense. Sales and marketing go hand-in-hand to drive revenue into the business. Without marketing, a pure sales strategy will not prevail. Consumers today do not appreciate ‘hard-selling’, and their purchase decisions are easier motivated through ‘soft-selling’ which is achieved through marketing.
It is a common first reaction to put all marketing activities on hold during recessionary times
However, it is in fact, beneficial to companies to continue promoting their brand so that consumers will keep them in mind and consider these brands when their spending power increases after the economy recovers.
As it is clear now that marketing is essential for all business regardless of the economic climate, here are some insider tips to create marketing campaigns that are effective.
1. Change your ad strategy – find out which of your marketing efforts has resulted in the most payoff
It is not about ceasing all marketing activities in totality. If anything, scrutinizing your marketing budget should help you plan for better and more effective strategies that give you more bang for your buck. Do an assessment of all your current marketing activities and determine the success of each campaign in terms of leads and sale dollars. Shift your marketing dollars to the strategy that yields your business more leads and sales.
2. Tailor your messages to be more ‘indirect’ and focused on social welfare, as opposed to hard-selling
A continuation from the second point above, hard-selling is a no-go especially when consumers’ spending power has taken a hit. Consumers’ level of sentimentality is heightened during times of economic downturns, and so should the business’. Spend some time crafting messages that are heart-felt and relatable so that your target audience will develop trust in your brand. Center your campaigns around social and community welfare such as donating a portion of your sales to a children’s welfare society.
Photo credits: D & D Ad
G-Star designed a collection of denim that was environmentally-friendly, made of biodegradable plastic in an effort to reduce pollution. Campaigns like this affects the consumers’ purchasing decision positively as it reduces the cognitive dissonance of spending money, by selling the idea of ‘saving the Earth’ through supportive purchases.
3. Focus on direct mail – by using a more ‘personal’ approach in tough times, consumers are more likely to buy into your brand / product offering.
TV commercials, billboard advertisements and the likes, also known as below-the-line advertising (BTL), are considered a one-to-many approach. Such methods of advertising loses its personal touch as it is intended for a mass audience. In tough times, consumers do not go out shopping as often. As such, these advertisements will receive lesser impressions. Delivering a ‘personal’ mailer to consumers will thus be more effective as your key message will reach your intended receiver. Your business will also have more control over who you wish to target with eDMs or letterbox mailers in general, which helps you spend your marketing dollars more efficiently.
Photo credits: Hubspot Blog
The Skimm uses a personalised tone in their eDMs, making potential clients feel that their interests are always being taken care of. Their candid tone is warm and friendly and does not sound like a general mass-mailer. Click-through rates for such eDMs will definitely be higher as the presentation of the content and messaging does not make readers feel apprehensive about wanting to find out more about their campaign.