5 reasons NOT to cut your marketing budget

The UK’s cost of living crisis is getting worse by the day, with millions of people across the country feeling the effects of the shrinking economy. In response to this, many businesses will be looking for ways to cut costs and save money.

Unfortunately, marketing and public relations are often the first aspects of a brand to take the hit and lose some, if not all, of the funding. However, in many cases this is not the ideal solution. Here are 5 reasons why cutting your marketing budget could have negative long-term effects.

Marketing is more important than ever

Companies that cut their marketing budget during uncertain economic times may think they’ve saved money on a consumable aspect, but that’s just not the case. Consumers still need to buy products and services during a recession, they’re just more likely to need to be careful how they spend their money.

With consumers becoming more aware of their spending and spending habits, the challenge as a brand is to convince the consumer that your product or service is a necessity rather than a luxury. The best way to do this is through marketing and public relations, which obviously becomes much more difficult if the budget has been reduced or eliminated entirely.

Stay ahead of your competition

As businesses across the country look for ways to cut costs, many may decide to cut their marketing budgets. Brands that don’t cut funding for marketing and PR will therefore have the upper hand over those that have; fewer brands marketing their products and services means less competition for those who pursue their marketing efforts. Reduced competition leads to lower PPC rates, as well as an overall increase in impressions and engagement. Lower cost for better results; you’d be crazy to miss that!

It’s important to note that Google’s algorithm is not affected by the state of the economy, which means that in times of reduced purchases, Google is always on the lookout for fresh and relevant content. With fewer competitors vying for Google’s top spot, a recession is a great time to ramp up your content production and work toward top rankings on the search results page.

Show your consumers what they are worth

During a recession, not only do your consumers run out of cash, but so does your business. Retaining customers is essential for any business, especially in times of financial difficulty.

Regular communication with your customer base helps build your relationship with them, even if they don’t make a purchase – it’s not because they can’t afford to shell out money for your products or services that they have lost interest in your brand. By continuing to market your brand message and values, you can ensure your customer base gets the genuine interest and attention they would receive under normal financial circumstances. When the country begins its eventual transition out of recession, you want your consumers to immediately have your brand name at the forefront of their minds.

Sustain your marketing strategy

It’s easy to assume that things will return to “normal” once the recession is over, but in reality, the aftermath of a recession can impact consumer buying habits long after the financial crisis has resolved. . If you decide to cut marketing budgets throughout this period of financial uncertainty, there will be a day when you deem the economy appropriate to start funding this aspect of your business again. However, your existing marketing strategy may not be adapted to new market trends.

Continuing your marketing efforts through times of financial hardship allows you to change strategy accordingly, giving your consumers exactly what they need along the way. Rather than rushing to create an effective new strategy at the last minute, brands can take advantage of the downturn and shape their marketing strategy in real time. The results will most likely be an entirely new strategy compared to before the recession, but that’s to be expected based on new consumer buying trends.

learn from history

Still unconvinced of the benefits of continuing your marketing efforts in times of financial hardship? Over the past 100 years, there have been several periods of recession and financial crisis, but this has taught us the best way to deal with these situations from a business perspective.

Traders have studied the recession of 1920/21. Results showed that companies that continued to invest in marketing continued to increase sales once the economy picked up, while competitors that cut budgets saw sales decline for the next 3 years ( on average).

Similar research on the 2007/08 credit crisis found that companies that cut marketing budgets actually performed better throughout the crisis. However, once the economic crisis passed, their income began to decline. Comparatively, companies that had continued marketing efforts throughout the crisis fared much better in the post-recession period.

This research strongly confirms how a short-term saving on marketing costs can have a long-term negative effect on your business.

Get help if you need it

Uncertain financial times are extremely difficult for businesses of any size. If you’re unsure how to manage your marketing efforts during these difficult times, contact us today.