We are experts in marketing. We work with the best technology marketers in the world. And, we’ve see two differing responses to marketing in a recession.
The first is the most familiar: marketing is discretionary and so, marketing gets cut. Marketing doesn’t immediately impact sales, therefore it gets cut. Investigating new market opportunities takes time, so that work gets cut. Developing new strategies don’t impact sales this quarter, so they don’t get done. Companies might keep their investment in lead gen, but that’s about it.
The second is the best practice for companies that are not afraid of their immediate future and are are willing to invest beyond a “quarterly” mentality. Start-ups don’t do this nor do second-tier players. Companies that have a long-term investment philosophy do this… they INCREASE their marketing investments in a recession.
And, why is that?
1) Competitors are cutting back. Every dollar spent now is a dollar that has a greater impact than during robust times when you have to spend just to keep up. There is less noise in the markets, so your message stands out now.
2) Marketing takes time. Hello. If you believe that marketing is about this quarter, then no wonder you cut back. Marketing is about creating a long-term sustainable advantage. Sure, marketing has a role in lead generation, but that is a relatively minor role. If you ensure that marketing is making investments in the future, then you will enjoy a robust future.
3) New opportunities will present themselves, but only if you are investing money in looking for them. If you cut back, then you’re just doing more of the same. If you continue to invest, you will see things that didn’t exist before. Many companies change their strategy in down times because they are have continued to investigate new market opportunities.
4) Your channel partners need your help. In a time when everyone is cutting back, your partners are suffering. However, if you step in to work with them when they need it the most, if you train them on your products and help them market your products more effectively – not only will you take market share, but you create loyalty.
5) Since your customers are cutting back their buying, you often have to change your messaging to reflect this. You need to understand how the decision-making process is changing. Doing this right requires some work to develop the right messages to the right buyers.
6) Finally, what kind of marketing organization are you? I have spoken about what role the CMO should play in CMOs as True Leaders. Are you the tail of the dog, or is your marketing organization driving the strategic direction of the company? If you cut back, then you are the tail.
BEWARE: The tail can get cut off.