History shows that the seeds of an economic decline or an economic recovery begin long before the indications of change become obvious enough to measure. Despite all of the sophisticated financial modeling tools, in hind sight, it is very clear now that the current recession didn’t begin in December of 2008 as the experts called it. The unraveling of the economy actually started more than 12 months earlier in mid to late 2007 with the first signs of trouble in the mortgage banking business.
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Calling an economic recovery is equally challenging because the events that must take place that will stimulate the economy to recovery must occur well in advance of the subsequent results that experts ultimately point to as the evidence that the economy is in a recovery and better times lie ahead.
Companies that are still sitting on the sidelines today waiting for a clear sign the economy is on the rebound before they resume their marketing efforts may have already missed their opportunity, not the opportunity to grow, but the opportunity to survive altogether.
History shows that more than half of the current list of Fortune 500 Companies began during a recession or a bear market. The data indicates that thousands of new businesses emerged during each of the economic slowdowns of the past seventy five years.
The evidence of company creation during challenging economic times is so compelling; researchers now predict that hundreds of thousands of new businesses have already been started in the past couple of years since the beginning of the 2007 – 2009 Recession.
The companies that will populate the future Fortune 500 lists have just opened up shop. They may be small or hard to recognize but if history is any indication, the economic future has already begun and is well underway.
If your company is holding back on marketing to save money, thinking that you can start back up when things improve, you may already be too late. Some new startup is eating away at your market share at this very moment.
Companies like Home Depot, Microsoft, Dell, Verizon and Capital One, all started during slow economic times when credit was tight, unemployment was high and the news was bad. They were probably uncertain as to future economic outlook at the time. No company can predict whether it will be successful let alone occupy a future spot on the Fortune 500.
New companies are often started from an idea, an urge to try something new despite the economic conditions at the time. There is evidence that the downturn may actually act as the impetus for a new company, especially if the founders perceive an opening in the market because the competition is timid and pulling back.
Cutting back on marketing when the economy slows down seems to be an easy decision. The company that cuts back will see an immediate benefit to the bottom line. Sales don’t drop off right away because the company is coasting on their built up equity in the market. They falsely presume that they can just start advertising again when things improve without damaging their brand or their position in the market.
But when a company cuts back on their marketing efforts, they reduce their presence in the mind of the consumers. They slowly drop off the consumer’s radar screen. That vacancy in the mind of the consumer is quickly occupied by the marketing messages of other companies. Once the consumer’s brain gives up that expensive mental real estate to the competitor’s message, it may be impossible to ever get it back.
History shows that those companies that maintained, or increased their marketing efforts during recessions and bear markets saw significant gains in their market share in the years following the downturn compared to those companies that cut back.
Trying to time your marketing is like trying to time the stock market; you end up getting into the market when it’s obvious to everyone the market is up and you end up getting out of the market when it’s obvious to everyone that the market is down.
Since 1945, the American economy has been expanding fifty seven percent of the time. Those companies that have been consistent with their marketing efforts are today’s market leaders. During the economic slow down of the 1980s, the Dow Jones Industrial Average was around 800 points. Today it is near the 10,000 mark.
For a business to grow and prosper, it must be fully engaged in the market telling customers how they can solve their problems or provide a service. Advertising is a company’s invitation to do business. Without it, that company is invisible to the consumer.
If you plan on being in business in the future, get your marketing back in gear before it’s too late. Work with a marketing consultant that will help you focus on your message, more than the medium. As the great advertising legend David Ogilvy said “If it doesn’t sell, it isn’t creative”.
Once you establish your message, determine the proper balance between reach and frequency for your budget and then stick with it.
Talk to you soon.
