When the economy tightens and sales are down is a time where only a few stand apart from the majority and reap rewards.
With profitability down and a bleak outlook, business owners and in particular accountants will look at ways to reduce costs to offset a reduction in sales. It’s a sensible approach to identify where potentially money is being wasted so long as the money is actually being wasted and the business will not be adversely affected by its reduction.
The problem with a cost cutting drive, is the potential classification and interpretation of some expenses. It remains commonplace for marketing expenditure to be considered discretionary and one of the first to be cut when looking for savings. It seems that many consider that the marketing budget is a nice to have when you can afford it, but when times are tough, it’s a luxury item that can be done without.
If people are willing to cut their marketing budget or even eliminate it when times are tough, it begs the question, what exactly do they think it is for. Isn’t the marketing budget used to generate greater sales either directly or indirectly? On this basis why would you reduce something that is responsible for generating sales, when sales are down? Are you not, just going to make the problem worse? You might want to reallocate the budget to other marketing activities that you feel may have a better impact on increasing sales, but to reduce a key driver for generating sales makes no sense at all, yet this happens time and again!
What should you be doing when the market is challenging? Ensuring that you are spending wisely, you should increase your marketing budget not decrease it! While your competitors are foolishly falling into the trap of reducing their budgets, this presents a great opportunity for you to capture market share by increasing your spend!
As always, as with any expense, you want to ensure you money is being spent wisely. So long as you have a well thought out marketing plan, then its not a case of being brave, spending more on marketing, rather its common sense. Find your savings in areas that don’t impact on sales. It’s little wonder that businesses cut their marketing and then find their sales deteriorate even further. The connection is obvious, yet for most, they continue to miss the obvious.
Don’t be like the majority, take advantage of a market downturn to capture greater market share!
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https://msofmarketing.com/7-mistakes-to-avoid-to-make-your-marketing-a-success-in-2021/
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