Why not to cut your marketing budget in a recession by a Sydney small business marketing consultant
Our Sydney small business marketing consultants have some news for you! Turns out a recession might just be the perfect opportunity for small businesses to retain new customers and solidify loyalty.
For the first time in 30 years Australia is back in a recession, as brought on by COVID-19 effects. We realise that many small businesses will, as a result, need to implement cost-saving strategies, such as various department budget cuts including for marketing. Yet, a Sydney marketing consultant for small businesses recently came across a Harvard Business Review article that explicitly argued against a marketing budget cut and we thought it best to share some key pointers of the article with our clients.
The article explains that by maintaining their marketing budget during a recession (not lowering it), businesses have an opportunity to accumulate higher revenue and profit streams in the long run - more so than even prior the recession. Recessions minimise market competition and thereby remove the pressure on product developments and new product launches which betters their ability to succeed in the market. Evidence also reinforces the fact that keeping product prices low – despite temptations to increase them – better reduces a business’ financial struggles in a price-sensitive economy. Lastly, if companies can create advertising material that encompasses consumer hardships and their emotions related to the recession it will significantly increase their share of voice.
As the article authors say: a recession is not the time to cut the marketing budget but to redirect its spending in a more profitable way. To ascertain where your money should go during Australia’s latest recessional wave, book a consultation at our small business marketing consultancy in Sydney.