Posted on April 16, 2020
The health and economic crisis caused by COVID-19 has left millions of workers and business owners in a precarious situation. In response to decreased consumer spending and declining revenue, and with hopes of avoiding layoffs, businesses are often tempted to cut their marketing budget. But a century of history has proved that increased spending in marketing and advertising during a recession can pay off. In fact, 97% of business owners surveyed by the American Business Media association (during the 2001 economic collapse) agreed that investing in marketing is important in remaining competitive in the future.
For a business, the ideal response to such an unplanned challenge is to adjust the way you communicate with clients and customers, and address the shared issue with empathy and mindful marketing. Now is not the time to abandon your HVAC marketing efforts, and here are 6 reasons why.
1. You’ll Jeopardize Your Current and Future Sales
Businesses should rethink how their marketing efforts will impact sales, both long and short term. Marketing is not a switch that can be turned on and off, rather it is a machine that gains momentum. If you suddenly stop or slow down your marketing efforts, you may have to start building that momentum again, regaining loyalty from your audience if they stopped hearing from you. Maintaining your “ share of mind” costs much less than rebuilding it. Research shows that companies who cut their marketing spend during a recession will see a 20-30% drop in sales and income over the next two years.
2. People Will Forget About Your Brand
When times are good, you should advertise. When times are bad, you must advertise. When companies reduce their marketing spend, they’re eliminating their communication with their customers. And, if your competitors cut back their marketing efforts while you maintain and adjust yours, you will stand out from your competition in your community. Put simply, marketing is more effective when there’s less competition. Keep this in mind, and you are already at an advantage (and will be when the economy recovers).
3. You’ll Miss Out on New Ways to Grow your Business
Right now, people want products that stress good value. Most people aren’t running out to purchase luxury, non-essential items. When the economy shifts, it’s important to reevaluate consumer demands. It is now even more important that your business stays top of mind. If your customers are limiting their spending, then you should work on a marketing strategy that has a customer-based sales plan that provides value.
During the 2008 recession, McDonald’s increased their sales by 2.6 percent.
Putting a large emphasis on their “value menu” is one of the reasons they did so well.
By introducing the“McCafe”, the brand’s new lineup of affordable coffee drinks became a huge hit among customers. Mcdonald’s capitalized on the fact that the need for caffeine wasn’t going anywhere. They reevaluated their needs for their consumer audience. Instead of having to pay a steep $5 for a Starbucks drink, coffee lovers now had another option that was half the price.
4. You’re Not Utilizing Digital Marketing
With a large portion of the workforce now working from home, Americans are exposed to online media more than ever before. This includes video-streaming services, news media, social media, and communication platforms. Digital marketing is not only affordable, it’s highly effective – by leveraging all of these available channels, you’ll be able to reach a broader audience (that is spending a lot of time online).
If you haven’t already, now is the time to shift from outdoor and print advertising to building your digital presence. With a digital marketing strategy, you can access traffic metrics that provide insight into consumer spending and behavior. Marketers can specifically target audience segments they know will lead to higher conversion rates. Focusing on your email marketing strategy, a pay-per-click campaign, and building your social media presence are cost-effective ways to drive profits. Additionally, because you can continuously track your ROI (rate of investment), businesses can anticipate seeing a higher revenue growth expectancy.
5. You’ll Lose Your Edge to Competitors
Market competition can be fierce. However, a declining economy creates a significant advantage for businesses looking to win back some of the market share from their competitors. If you cut back on your marketing efforts, once the economy improves, competitors will dominate the market and leave your business behind.
When McDonalds decided to cut their advertising and promotional budget during the 1990 recession, Pizza Hut and Taco Bell took the opportunity to take serious advantage. How’d they make out? Pizza Hut increased sales by 61%, Taco Bell sales grew by 40%, while McDonald’s sales declined by 28%.
6. Things Will Eventually Go Back to Normal
We’ve seen it before: after an economic downturn follows a period of growth and expansion. What you decide to do with your marketing efforts today could profoundly impact your business for years to come, for better or for worse.
Now is the time to be resilient and agile — adapt to the current climate, prove that your business can weather a crisis, and meet your customers where they are.
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