Common Cents Marketing
by Rich Odato

Here’s an idea that will help you when business is slow: Call FPL and tell them you’re no longer budgeting for electricity this year. Ridiculous, right? Yet many good companies make an equally ill-advised move when it comes to marketing. They cut the budget the moment things get tight—or worse, they fail to develop a thoughtful marketing budget strategy in the first place.

In the words of Peter Drucker, the father of modern business consulting, “Marketing and innovation produce results; all the rest are costs.” So why do some businesses look at marketing as “soft” costs or even as a luxury?

Do I have a vested interest in keeping you actively marketing? You bet. But don’t market to support my business—do it because it’s the right thing to do for yours. Before you start trimming your marketing budget, here are a few things to think about:

Buy Low, Sell High
There’s a precious commodity market out there for brand awareness and visibility and there’s never a better time to buy than when the economy is, as they say, “partly cloudy.” The real consideration is the volume of your competitors’ efforts among the 4,000+ marketing messages an American is exposed to every day.

If your prospect goes from seeing 10 messages per day from companies in your industry to seeing only one or two, the value of your message has increased exponentially while the cost has remained the same. When your competitors cower, use the opportunity to gain some ground. Remember: “Potter isn't selling, he's buying! And why? Because we're panicking and he's not.”

A well-known study that tracked 600 companies in the early eighties found that the companies that held or increased their marketing budgets during the recession averaged significantly higher sales both during the recession and for the three years that followed. Even worse, some experts estimate that it can take five to ten times the budget to buy the same visibility and market share in a highly competitive environment.

Powerful Brands Start At Home
If you want to have a powerful brand and loyal customers, you need to attract and retain the best people. How? By projecting strength. Strength attracts and weakness repels. I’ve seen too many companies cut their underperformers and simultaneously loose their superstars to better opportunities during uncertain times. What’s left? The mediocre middle. Is that who you want taking care of your customer?

What’s in Your Wallet?
When we talk about marketing budgets, we’re talking about advertising, publicity, direct marketing, online efforts, etc. These tactics can be costly because they’re also the most impactful. I’ve read articles that advise companies to move all of their efforts to cheap, guerilla tactics during slow times. I think you should have a smart and comprehensive program that includes the full range of tactics, including guerilla, all the time. It’s helpful to think of your marketing budget strategy like your square-footage strategy—one that you can buy smartly and sustain in good times and bad.

What About Survival?
Inevitably, some companies will have no choice but to draw their arms and legs up into their shell and try to survive a downturn. To win big when your industry is slow takes guts and money. But the rewards are great if you can achieve top-of-mind awareness. When your customer is ready to buy, you’ll be the first call. Otherwise, your competitor will.

Money In the Bank
Today’s sales are money in the pocket—critically important and gone just as quickly. Brand value is money in the bank. It’s important to build both. This is a real advantage for private companies that can take a long view without having to constantly sacrifice brand-building efforts for quarterly results.

The Word-of-Mouth Myth
“We’ll open the doors and rely on word-of-mouth.” Famous last words spoken by business owners who barely budgeted for infrastructure and will soon find themselves out of business. You need three things to make word-of-mouth work for you: flawless operations, a unique and compelling customer experience, and a marketing budget to get customers in the door so they can talk about you.

Spending to Save
By now, most people understand that it costs less to air condition a building at a moderate level continuously over time, rather than to let the building get  heat soaked and then try to bring it back. Think about that before you dial FPL.