Why Investing in Marketing During Economic Uncertainty is More Important Than Ever

During times of economic uncertainty, our first instinct is to look for ways to cut costs to keep our businesses afloat. While this might seem like a logical step to conserve resources, reducing marketing efforts during a downturn can actually do more harm than good.
 
In reality, continuing to invest in marketing during tough times can provide businesses with a competitive advantage, build brand loyalty, and position them for long-term success – just ask Procter & Gamble, who notoriously doubled down on marketing efforts when the COVID-19 pandemic hit and saw revenues surge compared with their competitors.’
 
Here’s why investing in marketing during times of uncertainty is more important than ever:

​Maintain visibility while competitors disappear
When businesses cut back on marketing, they also reduce their visibility to potential customers. If your competitors scale back their marketing efforts but you remain active, your brand becomes more prominent. Procter & Gamble benefitted precisely because other Fortune 500 companies went dark when the pandemic caused massive market uncertainty.
Customers who continue to search for products and services will see your company first, helping you gain market share that might have otherwise gone to your competition.

Build brand trust and loyalty
During economic downturns, consumers are more selective about where they spend their money. Businesses that continue to communicate with their audience, provide value, and demonstrate stability will build trust.
When people see that your company is still present and engaging with customers despite economic hardships, they are more likely to view you as a reliable and trustworthy choice – worthy of spending their hard-earned dollars.

Take advantage of lower advertising costs
Marketing channels, including digital advertising, social media promotions, and traditional media, often see lower costs during economic downturns. With fewer companies competing for ad space, businesses that continue advertising can benefit from reduced costs per click, impression, or placement. This means you can achieve better reach and engagement while spending less than you would in a strong economy.

Position your business for recovery
Economic downturns don’t last forever. When the economy rebounds, businesses that maintained their marketing efforts will be in a much stronger position than those that went dark. An unnamed client recently saw calls from new customers decline by 82% within 5 months of cutting marketing services due to uncertainty.

Keeping your brand at the forefront of consumers’ minds ensures that when they are ready to spend again, they will think of you first.

Strengthen customer relationships
Marketing isn’t just about selling – it’s about building relationships. During uncertain times, customers appreciate brands that provide valuable information, offer solutions, and show empathy. Content marketing, email campaigns, and social media engagement allow businesses to stay connected with their audience in a meaningful way, fostering long-term loyalty.
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Adapt and innovate for changing consumer needs
Economic shifts often bring changes in consumer behavior. Companies that continue investing in marketing can track trends, gather data, and adjust their strategies accordingly. Whether it’s shifting to more digital channels, offering promotions, or refining messaging, staying active allows businesses to adapt to customer needs in real time.
 
During recessions, successful marketing can lead to increased market share, as seen with Starbucks, McDonald's, and Hyundai, who adapted their strategies to capitalize on consumer behavior shifts and maintain or grow their market position. 
Here's a breakdown of how these brands, successfully navigated recessions through smart marketing:

1. Starbucks:

• Context:

During the 2008 financial crisis, Starbucks faced a 28% drop in profits, but they pivoted to focus on building personalized customer relationships and embracing newer technologies like mobile apps. 

• Strategy:

They continued to open new locations, especially abroad (like in China), at a rapid pace, demonstrating a commitment to growth even during tough times. 

• Outcome:

Starbucks became the largest coffee retailer with a 40% market share by 2019. 

2. McDonald's:

• Context:

During the 2008 recession, McDonald's not only managed to stay afloat but also grabbed significant market share from competitors like Burger King and Yum Brands. 

• Strategy:

They implemented a value-focused menu (like the Dollar Menu) and a shrewd marketing strategy that involved taking advantage of cheaper TV ad rates. 

• Outcome:

McDonald's grew in 2008, with sales exceeding both 2006 and 2007, before the financial impact was felt worldwide. 

3. Hyundai:

• Context:

In 2009, the auto industry was struggling, and Hyundai USA strengthened its marketing efforts.

• Strategy:

They invested in Super Bowl and Academy Awards commercial slots and a customer-focused ad campaign.

• Outcome:

Hyundai's market share increased from 3.1% to 4.3%, while competitors experienced a 22% sales drop, and Hyundai increased vehicle sales by 5%. 

While cutting marketing costs may seem like a quick fix to protect your bottom line, it can have long-term consequences. Investing in marketing during economic uncertainty not only helps sustain your business in the present but also prepares you for future growth. The businesses that remain visible, build trust, and adapt to changing circumstances are the ones that emerge stronger when the economy bounces back.

At BIG DEAL Company, we specialize in creating impactful marketing strategies that help businesses thrive – even in challenging times. If you’re looking to maintain momentum and stay ahead of the competition, contact us today to learn how we can support your brand’s growth.

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