By John Tabita

The Recession is Dead. Long Live the Recession

By John Tabita

According to the National Bureau of Economic Research, what’s been labeled “The Great Recession” officially ended in June 2009—at least in the U.S. Unfortunately, a lot of your clients and prospects may have missed that memo. To many, the recovery still feels like a recession. To make matters worst, there are growing fears that there will be a European recession in the next 12 months. Here in the States, we’re heading into the election season, and that’s usually characterized by a slowdown in the economy as everyone seems to collectively hold their breath until the dust settles.

When economic uncertainly looms, most businesses look to cut expenses, and the first item on the chopping block is usually advertising and marketing. If you make a living selling web design and marketing services, that’s not good news.

The average business owner tends to think that, in a recession or economic downturn, no one is buying, so why market or advertise? That would make sense, if it were true—but it’s not. In fact, a recent study shows that 22 percent of consumers made only minor cutbacks to their spending during this past recession. If you factor out the 20 percent who were tightwads even before the recession, that leaves 58 percent who did cut back on their spending, either by choice (“Pragmatic Spenders”) or because they where forced to (“Involuntary Penny-Pinchers”). So the reality is, most people continue to buy during a recession, but about two-thirds curtail their spending. This means business must compete amongst each other for this smaller pool of buyers.


In light of that, it makes no sense to cut your advertising and marketing, does it? Yet many do. Businesses who stop marketing have taken themselves out of the game, because they mistakenly believe that the pool has dried up completely; when instead, it’s time to get out bigger fishing poles and better, more tempting bait.

So how do you brace yourself for Round 2 of “We’re cutting expenses” and “We’ll starting marketing when things pick up again”? How will you respond when you hear that? (Perhaps that’s all you’ve been hearing.)

Keep in mind that, whenever a prospect gives you a “reason” why he won’t buy, it almost always boils do to one thing: he’s afraid of wasting money. If you pitch a PPC campaign to an insurance agent and he tells you he gets all his business through referrals, what he’s really saying (not out loud, but inside his head) is: “I get all my business through referrals because I’m such a great guy and all my clients love me and are constantly referring me. All I’d probably get online are cheapskates looking for the lowest rate, so what this guy’s suggesting is a complete waste of money.”

The same goes for cost-cutting prospects. “We’re cutting expenses” is code for, “No one’s buying, so advertising will just be a waste of money.”

In the middle of a difficulty lies opportunity. – Albert Einstein

What most business owners don’t realize (and what you must covey to them) is that a recession actually provides an amazing an opportunity to grab market share—for those with the guts to take action. What do I mean?

Study after study has proven that businesses who market their way through a recession experience higher sales, grow revenue, and increase profit and market share. In other words, Mr. Prospect, continuing to market and advertise when your competitors are cutting back is the perfect storm for you to steal their customers and make them your own.

Here’s where guts are required. It’s a scary thing to stay in the fight when everyone else is playing it safe.

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  • Lou

    Yes, we are still in a recession. For those who claim it is over, I’m not sure who they are fooling. Just ask anyone you know . . .

    I continue to get referrals even in this economy. There are some businesses that realize this lull in activity is a good time to update their portfolios and give their website a fresh new look. Many older websites are prime for a facelift and these can be completed at a lower cost than a redesign.

  • I agree that you should always invest during a downturn. This does not always mean throwing money at the problem. This is a period where investing time into raising our game can really pay off. Until this enters our brains mindset, things will stay the same. By looking at the situation in a cognitive way we can find solutions.

  • My clients are all charities, in Australia and the UK. The ones in the UK are suffering particularly badly, with some closing services because government funding has been withdrawn.

    Last winter I went a worrying three months with no freelance work: clients were scared to commit money to website development when their futures were so uncertain. I nearly had to quit freelancing. But this year I’m doing better than ever, with one substantial project following straight after another.

    Why has this situation reversed? Well, I’m networking better than I used to, and have hooked up with other web professionals to jointly bid for work, and made some good contacts.

    I’m seeing an increase in charities wanting fundraising micro-websites, as they realise they need to invest more in online activities to bring in donations and sponsorship to keep their services going.

    So even in an economic downturn, even in cash-strapped sectors, there can be a silver lining.

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