During a recession, the business landscape transforms itself. That’s not necessarily a bad thing. Lucrative opportunities come about that are otherwise unattainable during better and brighter times. I believe when the going gets tough, truly great entrepreneurship shines. After all, you are forced to be more creative with your efforts to build value. You will likely consider new partnerships; new sales approaches; dump business models, projects and people that don’t perform; empower your remaining staff to do more; and, most importantly, reevaluate your marketing strategy.
Often, the natural inclination to recession-proof a business is to slash marketing costs. That is the last thing you want to do. Studies completed on marketing during the recessions of the 70s, 80s and 90s show that the smartest thing to do is to spend on marketing. In fact, a study published by McGraw-Hill shows that companies that continued or increased their marketing spend during a recession had 256% higher sales than the companies who chose to cut or halt their marketing budgets. Moreover, companies that went into hibernation and tried to reestablish their brand position after recovery paid 4 to 5 times the amount saved by their marketing budget cuts. (If you are a marketer and contemplating how to talk to your CFO, read this).
There is no doubt that marketing is costly, but we have to remember that it is what drives sales. Like every other aspect of a business, when there is less money to spend on marketing, we simply have to become effective.
Mobile marketing is an ideal recession-proof marketing tool. Text-message and mobile site campaigns let you initiate an opt-in conversation with your target audience for a fraction of the cost of any traditional media campaign. Depending on how you do it, you can typically pay only upon success (e.g. when a message has been delivered or a mobile site is viewed). Because of this performance-based marketing approach, you can clearly measure the ROI of your efforts. In August, I published a Techvibes article listing the various studies that emphatically showed the positive correlation between mobile marketing, brand awareness and intent to purchase. Mobile Marketers’ Mickey Khan recently published an excellent SWOT analysis of mobile marketing. It is a must read if you are looking to shake up your marketing strategy with new and more cost effective tactics.
Despite industry analyst forecasted cut backs on traditional media and even online marketing, mobile marketing spend is poised to double this year. Of course, that’s not really all that difficult. Despite the very clear benefits of mobile marketing, it still remains a miniscule piece of the marketing pie. Thus, the only way it can really go is up. In a recession, that is a good sign. We should all be using it to differentiate ourselves and drive sales in the same direction.