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One of the first actions many businesses take in tough times is to cut their marketing budget. They do this for one of 3 reasons

  1. To save money
  2. Value isn't understood
  3. Their marketing isn't working

Cutting marketing to save money is understandable if you can’t afford to pay your bills. But it is a bit like killing the milking cow because you can’t afford to buy its food. Once you kill the cow, you won’t have to buy food but you also won’t get any milk.

If you cut marketing simply to save money there is a fair chance you've just consigned your business to failure...

If you don’t understand the value being generated in your business by your marketing, then you need to find this out before you consider any changes to budgets or activity. The only valid reason to cut marketing is number 3 – because at least in this scenario the business owner has taken steps to understand the return from his or her marketing. But all this proves is he or she hasn't found the marketing program that will work for their business.

As marketing is a series of activities that involve communication, cutting effort on marketing is effectively cutting communication with your customers and the market. There is a law about communication - you must do it or die! This law holds true for all businesses. If you don’t keep communicating with your customers; your suppliers and your staff, your business will decline. It may decline quickly or slowly; but it will decline.

The reasons you keep in communication with customers are actually more than you might expect:

  1. regular communication allows you to promote more products and services to the same loyal customers
  2. regular communication allows you to keep your database up to date
  3. companies that regularly communicate with customers often have higher referral to new customers and a better customer satisfaction level
  4. regular communication allows customers who don’t wish to have further communication the opportunity to let you know

In a broad ranging study of 750 consumer companies McGraw Hill found that companies who either maintained or increased their marketing investment during tough times(such as a recession) were able to recover more quickly when the economy improved.

Cutting marketing dollars is a short-term gain that ends in long-term pain. We have literally dozens of case studies of clients who have grown their business during and after recessions or slow growth periods by keeping active with their marketing. It’s not just me saying this. A consultancy called Executive Success run by Oisin Grogan and Kane Hooper reports achieving substantial growth in flagging companies by communicating more often and more effectively with existing and past customers on a company database. One of their clients tripled sales in less than 3 months after activating a program to communicate with a database of customers that had been ignored for a long period of time. This followed a period of limited promotion when sales were actually falling sharply.  The preceding graphs demonstrate that marketing budgets are important. Equally important is how effective your marketing program is. Over many years, I’ve found that all marketing programs are wasting money to a certain extent.

The best way to survive a difficult economy or market is to continue your marketing AND to make it more effective.

This article is brought to you from "Marketing Has No Off Switch" by Hunter Leonard, Blue Frog Marketing.

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