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Advertising In A Down Economy

Posted on 3rd Jan 2009 @ 3:05 PM

Many business categories have always understood branding. Jewelry, luxury cars, and yachts are all things we desire, but we don’t need them. I got a call from a client who sells these types of things. She was having an off year to the tune of about 5% down from the year before. “If branding is working, why am I still down?” she asked. Great question!

I answered her with a joke. Chris and Dave were fishing and suddenly Chris noticed an angry grizzly bear across the stream. Chris signaled Dave and they slowly started backing out of the stream. Dave stumbled, spooking the bear, who started charging after Dave and Chris as they ran. On the way through camp, Chris paused to grab his shoes. As hard as they ran, the bear kept gaining on the barefoot fishermen. Finally, Chris stopped running and started putting on his shoes.

“Chris, are you nuts? What about the bear?” exclaimed a frantic Dave. “I just realized something,” Chris replied, “I don’t have to outrun the bear—I just have to outrun you.”

It’s an old joke, but it demonstrated my point. I knew she was down for the year, but how was she doing against her competition? I asked her to ask around. Two days later we spoke again. The average drop in business among the others she knew in the industry was 12%. This was great news! She was losing ground slower than everyone else. You’d probably get excited, right? Not likely, and neither did she. So I asked her to consider one thing.

Branding is all about building desire for your product. It has no control over the timing of the purchase. Just because sales are down, it doesn’t mean people don’t want that new ring or new boat. It means they’re waiting for a more appropriate time to buy. The fact that my client was 7% above the industry average meant she’ll be getting more sales when the economy turns around. It takes guts and belt tightening to make it through a downturn, but cutting marketing will affect your recovery speed in the long term.

It’s a well-known reality in the marketing world that you grow market share in a down economy and grow sales in an up economy. That’s because many businesses stop marketing when things get lean, and that gives you a greater share of consumer attention. When things turn up again, and they will, you’re already first in line to earn their business. Remember that your business plan lasts through several economical cycles, and your marketing plan should, too.