It is far too easy to cut marketing expenses to help improve a company’s bottom line. After all, it is usually the single line item in a budget that can be cut with the shortest lead time. And the amount of money is usually significant - at least it should be. When business is down, there is a tendency to cut that “expense” with the full intention of reinstating the money when customers begin spending again.
The problem is that many companies view marketing as an expense rather than an investment. This is short-term thinking. When companies view marketing through the prism of building brand equity and not just building short-term sales, it puts decision-making in a whole new light. Customers don’t stop forming opinions of brands just because times are tough.
For decades, studies have shown that marketers who continue with brand-building activities in hard times come out on top when the smoke clears and good times return. But that doesn’t mean it’s wise to blissfully continue to do more of what you’ve been doing. The message needs to change to fit the environment. Consumers have to believe that the brands they patronize understand the environment in which they live. Consumers need to trust that companies have their best interests in mind in addition to their own.
Just as business models need to be flexible to meet the changing needs of the marketplace, so must the focus of the communications.
Why would American Airlines continue with their line:
“We know why you fly” in this economy? Customers have been presented increased fees for everything from luggage to pillows and blankets. Wouldn’t it be more appropriate to have messaging that reflects the times?A more relevant and honest message might be that the airline industry is hurting and needs to cut back just like households across the country have had to cut back. It is just a matter of perspective.
Spending is wholly appropriate and wise in hard times. Continue to invest, but only with the proper message. Marketing is all about building customer relationships. A marketer who ignores what is going on around them is like an ostrich sticking its head in the sand.
Larry Varnes is a graduate of California State University, Northridge, where he is now an adjunct professor of marketing. He is the retired vice chairman of Grey Worldwide, a New York-based advertising agency.