Penny wise, pound foolish: slashing marketing spend in a recession

In uncertain economic times, one of the first places businesses look to cut costs is in their marketing budget. After all, marketing can be seen as a luxury rather than a necessity. But does cutting marketing spend actually save money in the long run? Or is it a dangerous move that can do irreparable damage to a company’s chances of recovery?

The Dangers of Cutting Marketing Spend in a Recession

⚠️ It signals to your customers that you’re struggling or you don’t believe in your own product

In tough economic times, customers become more conservative with their spending. They look for brands they can trust to weather the storm. If your company cuts its marketing spend, it could signal to your customers or prospects that you’re struggling and that they should take their business elsewhere. If you don’t believe in your product or service enough to market it during tough times, why should your customers?

⚠️ It lowers your visibility at the precise moment when you need it most

When your competitors are cutting back on their marketing spend, it’s an opportunity for you to increase yours and grab market share. If you’re not visible, you’re not top of mind, and you’re not going to win new business. 

⚠️ It can be difficult to recover

Once you’ve made the decision to cut your marketing spend, it can be difficult—and expensive—to ramp it back up again when business conditions improve. Regaining momentum can be tough. 

Be Bold : Marketers who maintain or increase advertising spend during a recession see opportunities

Making the right marketing spend decisions matter:

⦿ amount of money spent

⦿ quality of creative and messaging 

⦿ halo effect (when advertising for one product helps sell another)

⦿ media mix

⦿ channel optimization

Tough times offer an opportunity to build stronger relationships with your existing customers by showing them that you’re there for them when they need you most. Increasing your marketing spend sends a strong signal that you’re committed to your customers and that they can count on you—no matter what.

Maintaining or even increasing your marketing spend sends a strong signal of confidence to both your employees and your customers. This is especially true if you maintain a consistent message and focus on customer retention during tough times. 

💭 Slowing down and seeing things in a different way can be your next bold move

By being bold and maintaining or even increasing your advertising budget during tough economic times, you can win market share, build stronger customer relationships, and position yourself for success when business.