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Bad Times Call For Better Marketing, Not Less

And cohesion between marketing and finance

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If it seems like some companies are trimming fat just in anticipation of hard times, you may be right. In fact, that seems like the conventional wisdom. Among the most tightened budgets is marketing, but when consumer dollars are fewer and farther between, it’s probably not a good idea to let them forget about you altogether.
Bad Times Call For Better Marketing, Not Less
The economic principle is fairly simple. Brokers will advise people to invest in Kraft Foods during recession because people aren’t going to stop buying cheap family favorites like macaroni and cheese. They will limit what they spend on other things as less and less of their becomes disposable. In turn, if you’re not providing a basic necessity, competition balloons not just from within a company’s industry, but from outside, too, as consumers decide to go out to eat or to a movie, but not to both.

That’s why Dr. Sharan Jagpal, of Rutgers University and author of Fusion for Profit: How Marketing & Finance Can Work Together to Create Value, says bad times are the worst times to cut the marketing budget. "In a recession, it’s harder to gain new customers, to convince existing customers to buy more, and to win back customers who have left," he said. "So companies often need to be spending more money, not less. They just need to be smart about it."

For example, notes Jagpal, when times are good, the vacation and video game industries are not in direct competition. "In a bad economy, consumers may have no option but to forgo vacations. But to compensate for this loss, they may reward themselves with a small, affordable purchase such as a videogame. And that’s why it’s important to pay attention to shifts in consumer spending—if you’re a videogame maker, you may well benefit from a dramatic increase in your marketing right now."

So in the end it’s about marketing strategy, not marketing cuts. The vacation industry, during trying times, probably shouldn’t focus on growing their customer base, but instead should focus on retention of customers unaffected or minimally affected.

Bad Times Call For Better Marketing, Not Less

Likely one won’t hear an objection to an increased marketing budget from the marketing department, but rather from finance. Jagpal suggests that the distance between marketing and finance, the tendency for finance to regard the marketing department as a money pit with uncertain return are old-world corporate structure thinking.

"When these two groups stop talking at each other, when they get out of their functional silos and start working together, they can create marketing strategies that help an organization thrive even in the grimmest economy. But that means Finance must squelch its knee-jerk reaction to cut the marketing budget, and Marketing must learn to create metrics that demonstrate the bottom-line impact of their ideas."

 

Bad Times Call For Better Marketing, Not Less
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  • http://hamshogblog.blogspot.com Hambeem

    Everywhere I turn, I hear about all my friends that own businesses getting really creative with their marketing. I’ve never heard so much marketing talk now that our economy exploded into pieces.

    What’s going to happen is a landslide of innovating thinking. It’s pretty refreshing. Lots more collaboration, think tanking and community efforts.

    Bring it!!!

    Hambeem

  • http://www.professional-mover.co.uk Professional-Mover London

    http://www.professional-mover.co.uk

    Anyone help me with my website for seo

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  • http://www.mountain-lodging.com/index.html GeezerGeek

    Some vacation rental owners are decreasing their spending on advertising during these hard times; but many know to do the opposite. My 1st and most successful client gave me a great analogy several years ago that I want to pass along.

    Paying for advertising for your business is like paying for medication for an ailment. If your ailment worsens, your doctor will likely prescribe an increased dosage, not a smaller one. It is the same for advertising. If your business is dropping off, regardless of the reason, you need to INCREASE your advertising, not decrease it.

  • Guest

    I see it in our field of recreation. People are not seeking less recreation, but rather something closer to home to save on gas. Most people won’t give up their recreation. We have to market our golfing programs online with events sites such as Eventful or Zvents to reach people. Also looking at more social networking. The days of using the Yellow Pages and bumper stickers is long dead.

  • http://www.retreatvacations.com GuestRichard Choura

    I have noticed a large drop off in cutomers in the last three months. I have been marketing to the luxury niche market. Is anyone out there changing their advertisng budget and content to mostyly affordable or cheap vacations and giving up on the luxury market? Or are they now doing a 50 -50% approach. Is anyone deleting their “luxury” content and replacing it with “affordable” content?

    • http://www.openeyemarketing.co.uk SEO UK Man

      Here in the UK I have seen all domestic and international holiday provider clients take a big reduction in booking rate HOWEVER not traffic volume. I think the key to doing well in these tough times is to ensure SEO or any Google advertising is sprinkled with some good old marketing magic. For example finding out ways to increase conversion rate via improved, modified, discounted call to actions ot promotional incentives.

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  • http://www.seosean.com Affordable SEO Services

    Very true, marketing should not, nor ever really, be dropped or made less. That’s the bread and butter of your business without a product and marketing you will not be in business for long.

  • http://www.ikroh.com Ikroh SEO

    This is so true. At times like these, businesses need their marketing budgets to work harder than ever to retain customers and try to gain new ones. Less marketing is definitely not a good idea, but they don’t necessarily need to spend more on marketing, they just need to spend it more wisely so they can get a higher return on investment.

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    Hello Professional mover please get in touch if you require help with your SEO. I can help you with that.