With the coronavirus, almost every business in the world has been affected. The only business that has shown significant improvement would be medical supplies.
But there are ways to beat the odds and at the very least survive this crisis.
Tips For Business Owners
- Look for ways to market your products more online.
- Look for ways to make your product portable. Find ways to SAFELY deliver your product or service to your clients door steps.
- Find ways to show you are helping respect the need for social distancing and protection.
- Help out your local neighborhood through free services for those in need.
Marketing During A Recession or During times of crisis or, as is currently the case during the Coronavirus pandemic, it is common for the first business reaction to be panic and quickly reduce marketing expenses. This was the case in the United States or in 2008, advertising spending fell 13%. Reducing budgets does indeed appear to be a simple and quick solution in troubled times … but the impact will often be disastrous when the world returns to normal and we will explain why according to studies and examples on previous crises.
Why you shouldn’t cut your marketing budgets and actions
Reducing your expenses in anticipation or during periods of recession can be more damaging than the crisis itself. A study by the IPA (Institute of Advertising Practitioners (Advertizing) in the UK) has shown that when you reduce your budget by 50% over a year, it takes 3 years to find the level of your competitors who have not spent any marketing dollars. In short, a loss of market share is lasting.
Maintaining your marketing activity can indeed help you to project a stable corporate image to its customers and maintain their loyalty, which will be easier than spending than recovering them. It is indeed essential to keep in mind that the loyalty of its customers is the most profitable and lasting source of income … and reducing its marketing investments (in particular loyalty) will inevitably lead to a progressive loss of its customers and a level of more important churn.
In short, to last, companies must at least maintain their marketing activity. And even to go beyond, continue to invest. We must not forget that the biggest global companies like Disney and Adobe have built their success during times of crisis and periods of financial uncertainty. Let’s look more concretely at examples of past crises and who were the winners!
In the 1920’s
The Great Depression
One of the good examples is the grain market. In the 1920s, the market leader was called “Post” and during the crisis of 29, they cut all their marketing budgets. At the same time, Kellog’s has doubled its own taking advantage of the lower prices of the advertising market. Profits increased by 30% in this depressing period and Kellog’s quickly became the category leader and maintained it until then.
Economist Roland S. Vaile studied the advertising investments of 200 companies during the 1920s and found that the companies that maintained their advertising investments during the crisis ended up with 20% more turnover after the recession and those who reduced their investments saw their incomes drop by 7%.
In the 1970s
The 1973-1975 recession
During the oil shock of 73-75, Toyota was the second manufacturer imported into the United States after Honda. Toyota maintained its marketing budget, unlike its competitor. In 1976, it became the first manufacturer imported to the United States, ahead of Honda.
In the 1990s
The 1990-1991 recession
During the 1990-1991 recession, McDonald’s made the decision to reduce its marketing and promotional expenses.
Pizza Hut and Taco Bell took advantage of the situation by keeping their spending levels. As a result, Pizza Hut saw its sales grow by 61% and those of Taco Bell by 40% when, on the other hand, those of McDonald’s decreased by 28%. McDonald’s experienced a deep crisis at that time before taking measures in the 2000s to look at their market share.
Likewise, a study by MarketSense has shown that brands like Jif saw their sales grow by 57% after increasing their marketing expenses during the recession.
In the 2000s
The 2008-2009 recession
One of the best examples is Amazon, which has increased its sales by 28% while continuing to invest in developing innovative products such as the Kindle. This made it possible in particular to sell at Christmas 2009 more e-Books than paper books. This especially allowed Amazon to show its reliability and its added value in times of crisis by showing a cheaper alternative.
We have followed the advice we provide you since in this period of crisis (since February 2020) and have decided to intensify our marketing massively :
In short, the choice of Glenn Website Design was to MASSIVELY invest in communication and marketing in times of crisis because we think that it is in this period that we will take (and more easily) sustainable market shares and that we will also be in the best position to re-attack the recovery.
And you, what are you going to do?
Now is the time to invest in marketing. So get moving.