The tragic irony of cutting marketing in a recession

June 4, 2009

Do you ever have one of those days when it seems that the things you read and the conversations you have revolve around a particular theme?  I am having one of those days.  The theme is the tragic irony of companies cutting marketing spending during a recession.

 This theme surfaced this morning in a conversation I had about the unfortunate tendency of not for profits eliminating marketing spending during a recession, and then again when I was reading an article in AdAge warning CMOs about the dangers of cutting marketing resources

I call this theme a tragic irony because it really is about a company’s well intentioned actions bringing about a fatal result.  A company might decide to cut investment in marketing in an attempt to save money, but in doing so, it cuts off its ability to drive revenue. 

 What you are really cutting

At its most basic level, marketing is all about communicating with your consumer to understand what he needs and then to help him satisfy those needs.  You can satisfy his needs by either showing/telling him how your product or service helps him or by developing new products or services that better meet his evolving needs.  If a company decides to stop or reduce marketing in a recession (when consumers are reviewing every purchase with more scrutiny than ever before), how can it expect to keep its current consumers and revenue streams, let alone appeal to new ones?  More importantly, if a company decides to stop or reduce marketing, but its competitor continues marketing, it is likely to lose consumers to the competitor who is better engaging them.

 Consider reallocation before cutting

With all of that said, I definitely understand and recommend the idea of directing marketing investment towards the most efficient and effective marketing tools in a recession.  A recession isn’t necessarily the time to get overly ‘experimental’ with marketing tools to see what works.  Investing in the tools that are proven to work with your consumer is a strong strategy when money is tight and the future is uncertain.  The key is that a company continues to invest in marketing, and perhaps just chooses the very best tools.  This is about a reallocation of dollars within a marketing budget, not a reduction of the marketing budget.

To companies out there who are currently considering making cuts to their marketing investments, I urge you to reconsider.  You are taking a treacherous path.  Marketing is your way to keep your relationship going with your consumer.  Cutting off or reducing that relationship will cut off or reduce your revenue, and that seems tragically ironic.

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