You see it over and over again in the business world. When things start to sink a little in sales, marketing gets the axe, even if marketing previously has been connected to more golden days. We’ve seen this recently at Proctor & Gamble, who opted to cut a large portion of their marketing personnel in order to focus more on social media initiatives. There also are big stories about how Pepsico has fired over 1,500 marketing employees and several agencies.
Why does this happen? It’s easy, frighteningly easy, to think that marketing is just throwing money out the window, particularly if the C-Suite is not fully in touch with what the marketing team is up to. If the company does not have a secure lead nurturing program in place, if the company suffers from silo syndrome, or if the company does not have accurate ways to measure the ROI of its marketing campaigns, of course there will be no ammunition to fight the fear that money is being wasted in the marketing department.
Where Did They Go?
When a company is producing press releases, exhibiting at trade shows, or advertising, they are telling the industry, “We are strong and we are here.” Everyone in the industry has a general idea of how much that booth space costs, how much that ad costs, or what was involved in creating those booth graphics. If your company is out there doing that work, you are saying that you are financially stable enough to be able to afford those tactics.
The other side of the coin is that if you refrain from marketing or if you make a sudden and severe cut, you will be sending the opposite message. Especially during a recession, an absence from the industry’s public circle of communication can indicate that your company is suffering more than your competitors or that even worse, you have gone out of business entirely. While many companies may feel (based on a gut instinct, perhaps) that their marketing tactics are not creating tangible results, the failure to market one’s company can result in letting customers and competitors tell the story instead.
Control Your Company’s Narrative
Last month, we talked about how controlling what your company does can help eliminate your fears because the unknown will always be more frightening than known entities. Well, marketing allows you to control something valuable – the narrative that your industry is hearing about your company. Note what Jenny Darroch wrote for The Huffington Post back in 2009.
“I found that firms that spent more on marketing than their peers during the recession enjoyed a higher market value five years after the recession ended. To me, this result provides clear evidence of the long-term effects of marketing expenditure.”
This may seem counter-intuitive, but it makes sense. If you can withstand hard times, you can excel during better times. If you can hang in there with your competitors, you remain visible as viable competition. You can remind the industry of your history and encourage your customers, letting them know that you are still going strong.
Think Outside the Box
Instead of cutting your marketing, think of other ways to build up your company’s bank account. Maybe you need to evaluate what you have been doing to make sure you are in all of the best possible places for your brand. Maybe you should evaluate your sales force to make sure that they are presenting your company and products in the best way possible. Clean up before cutting. The message will be much stronger.
Does this make sense? I’d love to hear your thoughts!
This is a great post, Margie. I have been through this more times than I can count, and not always when the company is in a downturn. Sometimes I have to deal with this when things are great. "We're on an uptick - why do we need marketing, especially where we can't see a tangible ROI?" Can that business afford to stop and have to rebuild that momentum once they realize that mistake? I agree with @Chris_Eh_Young that you need to make your marketing dollars work harder. No doubt.
I would go so far as to say that marketing is even more valuable and more important in tough times. Why? Your competitors just slashed their marketing dollars -- meaning your marketing spend should dominate the space and keep you in front of your potential sales for when times get better.
Dead on Margie. Clean up before cutting. Most people want to cut things when times are bad when instead they just need to get their efficiencies in order.
Untargeted marketing and the spray and pray need to be cut yes, but the stuff that's performing well needs to be amped up. Most companies don't track what's working and what's not well enough though. So when things get tough, they cut across the board.