Small businesses often find themselves contemplating cost-cutting measures to weather the inevitable storms that come along, such as the current uncertainty caused by rising interest rates.
In many cases, marketing budgets are among the first to be slashed. However, a counterintuitive yet vital strategy also emerges during tough times: maintaining and even increasing marketing efforts. Here are 10 things to think about that reinforce why small business owners should carefully consider how marketing could help during tougher financial periods. These are as important for business to business as it is for business to consumer marketing.
1. Building brand resilience
By consistently maintaining marketing efforts during an uncertain financial situation, you can build brand resilience and establish yourself as reliable player in the market. Companies that continue to invest in marketing during tough times or even through a financial crisis may witness significant brand equity growth and customer loyalty. (Kumar et al., 2020).
2. Seizing market opportunities
During a volatile market, some of your competitors may cut back on marketing or even exit the market entirely. This creates a void that proactive businesses can fill by ramping up marketing initiatives. Research indicates companies that increased marketing expenditure during periods of recession experienced higher sales growth compared to those that decreased or maintained their budgets (Lamey et al., 2018).
3. Enhanced customer engagement
In tougher financial times, customer loyalty can waiver as consumers look to shop elsewhere based on price. Effective marketing campaigns enable businesses to stay connected with their customers, demonstrate empathy, and respond to these changing needs. Engaging with your customers on through personalised content or direct marketing can help foster continued loyalty and maintain a far stronger emotional connection.
4. Leveraging digital platforms
Marketing spend need not be exorbitant. By utilising cost-effective digital platforms like social media, direct marketing, and SEO, you can reach a much wider audience without breaking the bank. Also think about how you can create partnerships with like-minded businesses that can complement yours, and visa versa.
5. Measurable results
Being able to measure your marketing activities is essential to establish your ROI. This makes digital marketing even more critical during tougher times. Providing you with valuable data and analytics, it allows you to measure the effectiveness of campaigns and help inform whether your strategy is working or not. This data-driven approach enables businesses to optimise marketing efforts and ensure every dollar spent delivers tangible results (Brady et al., 2019).
6. Negotiate with suppliers
A strong marketing presence isn’t just about your end-customers. It can also boost the reputation of your business, granting you stronger negotiation power with suppliers. Suppliers may offer more flexible payment terms or discounts to businesses with a promising future (Grewal et al., 2020).
7. Exploring niche markets
During economic downturns, consumer preferences may shift, leading to the rise of niche markets. A well-thought-out marketing strategy can help businesses identify and tap into these emerging opportunities, before their competitors do.
8. Long-term growth
Short-term cost-cutting measures might seem beneficial during tough times, but they can actually hinder your long-term growth. Businesses that maintain marketing efforts are better positioned to rebound and thrive when economic conditions improve (Reinartz et al., 2018).
9. Attracting talented employees
A strong marketing presence can also attract talented employees who are seeking greater job stability and believe in your company’s future prospects. Spend the time to sharpen your employee value proposition.
10. Government support
In some cases, governments offer incentives and support programs to businesses that continue to invest in marketing and innovation during economic downturns (Angrisani et al., 2021). By taking advantage of these opportunities, small businesses can gain a competitive edge.
Cutting budgets can be tempting. But the significance of maintaining your marketing during a recession cannot be overstated. Small businesses that carefully consider and strategically invest in marketing during tougher times stand a far better chance of surviving and thriving when economic adversity strikes. Rather than a cost, embrace marketing as a lifeline to grow and secure your business’s future success.