These days, it's hard not to take notice of the recent economic downturn. Within organizations, business functions from A-Z are finding themselves adversely impacted and taking action in a variety of ways. And unfortunately, the world of business to consumer (B2C) marketing is no exception. In fact, it leads us to a very thought-provoking question. 'Is it wrong to invest in marketing during a recession?'
Thinking about your response, take a moment to reflect on what the tendency might be within your own organization. Would several of the senior leaders agree with the following statement?
'Generally speaking, marketing is considered the soft side of the business that at the right time, can be leveraged to strengthen customer relationships and manage corporate reputation. Much like an R&D function, it is most optimal to invest in marketing when the economy is doing well. However, during a recession, cost-cutting measures must commence and the marketing budget is quite discretionary and should be reduced.'
I can appreciate the logic behind this approach as the pressures of a recession are quite real. After all, one has to batten down the hatches to keep the ship afloat. But thinking strategically, I would advise to consider taking a second look.
Decisions made in such a context are often an opportunity to gauge marketing maturity. On one side of the spectrum, marketing is still in the younger stages of development and considered a supporting operational activity. While on the other, its potential is fully realized and integrated as a fundamental strategic function. Where your organization falls within the 'marketing maturity spectrum' will likely influence how senior leadership responds to that opening question.
"...what should change during an economic downturn is the marketing strategy rather than the perceived value of the marketing program."
In my humble opinion, what should change during an economic downturn is the marketing strategy rather than the perceived value of the marketing program (a common mistake). In fact, the role of the marketing department has never been so integral in transforming the organizational mindset to one of customer retention, value creation and alignment to core competency.
If you can believe it, it's completely plausible to increase market share during an economic downturn by capitalizing on competitors having a 'less strategic moment' (shall we say). Hyundai’s approach to seize market share following the 2008 recession, is an exemplary example. Also, browse the perceived strategy from TechCrunch surrounding the recent price cut of the Apple Watch. Or my personal favourite, have a look through an example from while I was marketing for public transit; we formed the first public-private partnership with the AIR MILES® program as a loyalty strategy.
With several great examples to choose from, don't be misled in to thinking that the road to victory is as simple as the marketing executive setting performance expectations. An organization must be well down the road of developing the marketing function with strategic intent in mind. The vary fibre of the marketing team, must be strategic, integrated and focused on results. As famously quoted by Louis Pasteur, “Chance favours the prepared mind.”
In short, an economic downturn doesn’t always equate to doom and gloom. With a little strategy, it can be an opportunity to showcase the true value of a great marketing investment.
