February 12, 2018, posted by Tony Quin
Make Hay: Why Marketers Shouldn’t Forget the Business Cycle
After creeping back for years, the economy is finally firing on all cylinders. When combined with high consumer confidence, fat corporate tax relief and barely a cloud on the horizon, it’s a great time to be a marketer. But it is at precisely this moment that brands should be thinking about the inevitability of the business cycle.
Yes, there is plenty of hay to be made in the next year or so, but sooner rather than later the winds will change, the economy will shift, and wallets will start to close. It might be a sustained bear market as stocks finally lose steam, inflation catches fire or some other event that will trigger the shift. But when lean times come again, as they will, the companies which have prepared, will ride through the storm with confidence.
One of the first things to always get cut in a downturn is marketing. That’s because many companies treat marketing as an expense. In the last recession marketing spends were cut dramatically across the board and the result was that the majority of companies coasted for years on whatever marketing momentum they already had. Of course, they didn’t really coast. Instead, they lost share to better-prepared competitors, which had either the money to invest in marketing or marketing infrastructure that they could leverage.
As stated in the HBR article, “How to Market in a Recession”:
This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.
Back in 2008, marketing infrastructure, which integrated all the pieces of modern digitally-centric marketing (content, websites, mobile, email, automation, CRM, personalization and more) was still in its early days. While some large brands had already started to connect the dots, most smaller companies had not, and were happy to avoid the cost and effort as they hunkered down. The opportunity that forward-thinking brands saw was the systematic nurturing and growth of prospects and customers with behavioral data and content, without the constant cost of advertising.
Fast forward to today. The sun is shining, and the rising tide is lifting all boats. Many companies have upgraded their websites and mobile apps, but only a few have developed integrated marketing systems. The software that powers those systems has become much cheaper and more accessible, but still, many companies have not done the strategic planning to figure out how to connect the pieces, and then what to do with the system once it is up and running. With business booming, once again many are ignoring the need for every brand to have an integrated system to serve today’s demanding, digital consumers. While perhaps they can get away with it for a while during good times, they will quickly find themselves at a competitive disadvantage when the next downturn comes. Before long recessionary clouds will gather again, and those brands that have done the work to build their marketing system will not only glide through the storm but come out the other end even stronger.