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.