Past facts to help you face today’s challenges

Okay, we all know times are tough – and tough times call for drastic measures. It’s time to cut expenses to the bone and manage every detail of our businesses better than we ever have. But, as we tighten our spending, we must resist the impulse to reduce our marketing budgets. That’s because those marketing activities may be the very things that ensure the survival of our businesses in the short term and healthy growth in the long term. If you have doubts, look at some of the facts from past recessions.

Here are some facts that may surprise you – and help you build your business!

1970 Recession Year
An American Business Press (ABP) and Meldrum & Fewsmith study showed that “sales and profits can be maintained and increased in recession years and (in the years) immediately following by those who are willing to maintain an aggressive marketing posture, while others adopt the philosophy of cutting back on promotional efforts when sales appear to be harder to get.”

1974-1975 Recession Years
An ABP and Meldrum & Fewsmith 1979 study covering 1974-1975 and the years following found that “Companies which did not cut marketing expenditures experienced higher sales and net income during those two years and the two years following than those companies which cut in either or both recession years.”

1981-1982 Recession Years
McGraw-Hill Research’s Laboratory of Advertising Performance analyzed the performance of 600 industrial companies during the 1981-1982 economic downturn and found that “business-to-business firms that maintained or increased their marketing expenditures during the 1981-1982 recession averaged significantly higher sales growth, both during the recession and for the following three years, than those which eliminated or decreased marketing.”

In their report “Media Advertising When Your Market Is in a Recession”, the Cahners and Strategic Planning Institute found that businesses that increased media advertising expenditures during the recessionary period “gained an average of 1.5 points of market share.”

1990-1991 Recession Years
Reporting on a survey of AMA members about their spending during the 1990-1991 recession, Management Review Magazine noted that most of the firms that raised their marketing budgets during this period enjoyed gains in market share. And, they found that companies that increased their budgets and took on new people were twice as likely to pick up market share.

What This Means
The bottom-line is that marketing builds awareness and maintains consumer-brand relationships. If it’s important when the economy is strong and the marketplace highly active, how much more critical is it when a downturn occurs and the demand for goods and services diminishes? When there are less consumer dollars to go around, you have to get a larger market share if you want to survive and grow.

So, market as aggressively as you can and you’ll reap the rewards. As Harvard Business Review so aptly put it, “Advertising is the anti-recession tool.”