There is no doubt that being in business is difficult. There are many challenges you must face every day. But despite these challenges, American companies are doing surprisingly well. The most successful companies are those that learn how to increase their productivity while at the same time controlling costs. The successful companies keep on advertising.
Advertising is often the first target for cuts because it is hard to measure and difficult to understand. Advertising seems like an easy cut to make, it is an intangible. You don’t have to fire anyone and your staff will hardly notice. It’s not like cutting the budget for office coffee. Cutting out your advertising is an easy decision. You can just cut back for the time being and then pick it back up when things get better.
While cutting your advertising budget may seem like an easy answer, it could very well be the most costly decision you will ever make. Almost universally, cutting back on your advertising will lead a company to have real troubles in the coming years. It could be fatal.
When the economy changes direction, buying habits change. This creates new opportunities for the business that hangs in there and keeps advertising. People are still spending money but now they are making new ‘value’ decisions. People are looking for new answers to their problems. They are open to new suggestions, like shopping with you for a change.
Business goes where business is invited. Your advertising dollars can actually go much further than ever before, especially when your competition cuts back. You’ll have a larger share of market awareness or “mind share”. It is a proven fact that mind share leads to market share. The consumers need to know you before they need you. A majority of consumers say they are likely or very likely to do business with the first name they think of when they have a need or a desire for a product or service.
Companies that increase their advertising during a recession actually grow significantly faster than firms that maintain or decrease their advertising. Companies that invested more in marketing in a down market realized a 4.3% increase in their Return On Investment. Companies that increase their advertising during slow times gained market share three times faster in the two years following a recession than those companies that cut their advertising budgets.
So, where do you go from here? Simple, you should establish an advertising plan and stick with it. The First Key of Advertising Success is consistency.
American Business Media found that maintaining your advertising even in difficult times has a direct impact on current and future sales and that maintaining market share costs much less than rebuilding market share later on.
According to Coopers & Lybrand, advertising on a consistent basis enables you to solidify your customer base, take business away from less aggressive competitors and positions your company for future growth.
Advertising is a lot like exercise. You have to pick an exercise routine and stick with it for the long run to be healthy and fit. When you stop, you get out of shape and become non competitive. Make sure your business remains fit, in shape and competitive. Stay the course.
Talk to you soon.