If you’ve been to a gas station or a grocery store recently, you know that inflation is raging in the United States right now. The official government figures peg inflation at 7.9% as of the time of this article, but if you’ve bought a gallon of gas or a package of steaks lately, you know that number is woefully low.
No one really knows how much inflation is affecting individuals, because it’s dependent on what you buy, but a fair estimate is that groceries are up about 20%, and fuel is up 40% over a year ago. Regardless of what the actual numbers are for you, it’s safe to say that everyone is paying more, for just about everything, and businesses are no exception.
Typically, when inflation rages and a recession looms on the horizon, companies (and individuals) begin looking to trim costs. It’s only natural to go into protection mode at times like this. Hiring freezes go into effect, pay raises cease, and marketing budgets get slashed. It’s this last one that concerns me the most.
I know this sounds self-serving, and I suppose it is to some degree. After all, DanMatt Media is a marketing company. But my message to clients at times like this is always, “Don’t slash your marketing budget. Compromise elsewhere, and find a way to keep reaching your audience.”
As a business owner or executive, you still need to market your company, even in times of economic uncertainty. You still need to sell your products and services, and you still need to get your company in front of people who are ready to buy. Slashing your marketing budget might save you some money in the short term, but it will almost always cost you money in the long term. The phrase “penny wise, pound foolish” is applicable here.
When you slash your marketing budget, you lose the market share that you were previously enjoying. Your competitors can then swoop in and gain that market share, which puts you further behind. It’s a lot like holding onto your investments during a recession. Yes, the value of your 401K falls, but when the market conditions improve, you can buy back on the cheap.
The same is true with your marketing. Let your competitors make the mistake of slashing their budgets. When their ads no longer show, yours will, and those customers who might go to them will become yours instead. That in turn will grow your business and your revenue, even in harsh economic times.
The lesson here is to be disciplined and take the longview. When the economy sours, maintain your marketing budget and your presence in the marketplace. Get your ads in front of people who are still looking to buy, and snatch the customers that your competitors have given up trying to recruit.