I still remember my basic marketing class and the professor that I did not particularly like; I mean not her personally, just her teaching style. Thank heavens, then it only got better from there. However, I vividly remember one thing she said about marketing during significantly declining sales and revenues. She was so right!
So, what happens when things get tough? Decision makers, who often have financial, managerial, accounting, or technical background, cut the marketing budget to a minimum; -50%, – 80%, or even -100% for “the time being.” While this can make certain sense when due to some black swan event such as the coronavirus nationwide lock-down, under normal circumstances, this can further damage your business.
In my view, marketing budgets should always be managed in the most effective and efficient ways to maximize the ROI; crisis or not. Cutting it when they are needed most just because it will improve a company’s financial statement in a short term seems like admitting that when business operates as usual, marketing budgets are being mismanaged. When being employed for a fortune 500 company, I could not believe how many guys higher up in the corporate hierarchy could not or did not want to grasp this concept. It seemed to me as they operated in a different paradigm.
The bottom line: 1. Evaluate the situation carefully before arbitralily reducing marketing budget just to save in the short term; it can backfire later and you may never rebuilt your market share. 2. Budget on the basis of expected ROI during the difficult times as well as when things are fine. Evaluate your results and continuously improve. 3. Be creative in media selection and analyze what, if anything, makes sense for your particular business during the crisis situation (does your business operate at all, do you expect it to recover quickly when things get back to “normal”, do you expect to survive, can you evolve into new markets or products, how can you better serve your customers?). 4. Negotiate the best advertising deals you can without crossing the line. Now, most media will be glad to offer you huge discounts off your regular pricing, perhaps as much as 50%. 5. Do not take advantage of the situation forcing the media to give you something for nothing. They also have bills to pay, and when the times get better, these guys will remember whether you were fair or took advantage of them.
Finally: adapt because the world we live and do business in won’t be the same again.
