When times get tough, one of the first places many businesses look to save money is marketing. If you want a thriving business and not one that just survives, this is a huge mistake, and I’m going to share some reasons why in today's episode.
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Why Marketing Is Critical During An Economic Downturn If You Want To Thrive
When times get tough, one of the first places many businesses look to save money is marketing. If you want to have a thriving business long term and not just survive, right? I think this is a huge, huge mistake, and I'm going to share five reasons with you today.
Hi, I am Tim Fitzpatrick with Rialto Marketing, where we believe you must remove your revenue roadblocks if you want to accelerate revenue growth. Thank you so much for taking the time to tune in. I really appreciate it.
I think this is a very timely episode. A lot of news about downturn in the economy, recession, who knows what the heck is going to happen? Take out your crystal ball, but there are a lot of people that are concerned about it. I actually had a conversation with one of my best friends a couple of weeks ago. He's in a business development account management role. He sells to medium, to large enterprises. And he shared with me Tim, God, in the first couple weeks of January, I lost the majority of my pipeline that I already started to build for 2023. People were just looking to cut expenses, cut costs. For him. A lot of what he does is it's improvements within their real estate, commercial, their commercial buildings, their offices, and people are cutting.
So my question to you really is, gosh as people are concerned with the downturn, should people really be looking at marketing as a place to cut? I think, clearly stated, I think that is a huge mistake. Here's the five reasons. I hope you find this helpful. If you've got questions, reach out. I'd be happy to chat with you and have a dialogue about it.
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Marketing is an Investment and not an Expense
First, this is more of a mindset thing. Marketing is an investment and not an expense. Plenty of people view marketing as an expense, and when we view things as an expense, a couple of things with that. One, we can cut expenses. But two, we also don't view expenses as something that we get a return on investment. And that is just not the case with marketing. Marketing is an investment and it is something that we should be getting a return on. If you're not getting a return on it, then that's a whole nother conversation. But marketing should be an investment that you're getting a return on. The other important thing to keep in mind here is marketing is not a switch, right? It's not a light you can just turn on and off. We don't need it right now. Let's just turn it off. Two months from now, let's turn the switch back on and we just start right back where we left off. That's not the case. Marketing is more like a flywheel, right? It is a marathon. It is not a sprint. With a flywheel, you feed it and it starts to gain momentum. And once it gains momentum, as long as you keep feeding it, it just maintains that but if you stop feeding it, it slows down. And then guess what? It takes that much more energy for it to gain the momentum that it used to have. That's what happens with marketing, right? It is a process that takes consistency over time. If you do not believe that your marketing is just going to be these start and stop fits and it's going to be up and down, up and down, and that is not good for anyone's business.
Opportunities in an Economic Downturn
Number two, many of your competitors are going to be looking to cut marketing costs, right? At the same time all these people are cutting costs. What does that do? To me, I see that as an opportunity. If you can be disciplined, hold steadfast, right, and invest in marketing, you can create an extreme competitive advantage and take market share. When other people are just looking to hold the current market share they have. It reminds me of the quote Warren Buffett, be cautious when others are greedy, and greedy when others are cautious. Now is the time, really, to honestly invest more in your marketing, not just hold steadfast, take market share. It is an opportunity to stand out from your competitors. And in some cases, some of the areas where you're investing in marketing will actually be less, right? Because the demand is down, so the price goes down. So I think there are a lot of opportunities to create a competitive advantage in a downturn when your competitors look to cut. If you can invest, you're in a much, much better place, I believe.
Growing Businesses Invest in Marketing during Downtimes
Number three, growing businesses invest in marketing during downtimes. There are multiple studies. I should have looked it up before I jumped on, but early in the pandemic, I remember reading an article from somebody on Harvard Business Review, and they had done a study about businesses that had grown consistently over time, and they had looked at how they invested in a downturn. Really important, right? They take action early on in a crisis. They have more of a long term vision, and they focus on growth instead of cost savings when things go down. They focus on growth and not cost savings because they know they're not thinking short term. They know long term that investment now is going to lead to significant growth over the long term. So if you don't believe me, do a Google search for what do growing businesses do in a downturn? How do they view marketing in downtimes? You will see multiple articles about this. So this is not just coming from me, somebody that's biased, that is, in marketing. This is the reality. Growing businesses invest in marketing during downtimes.
Opportunities in Every Market
Now, related to this is number four, which is there are opportunities in every market. In 2010, I got involved in residential real estate, which most people would think, oh my gosh, what a horrible time to get involved in real estate. The market was way down. It had crashed. But in that market, the opportunity, the huge opportunity was in foreclosures short sale business. So I started knocking on people's doors that were in foreclosure and started doing short sale business. There are opportunities in every market as things evolve and change, okay? We need to look for those opportunities. And when we find those opportunities, if we're willing to invest in marketing, we can take extreme advantage of those opportunities. So my question to you is as things slow down, are you going to hibernate or wait for the dust to settle or are you going to take action and take as much advantage of the opportunity as you possibly can? Your business will benefit, I believe, in the short term, but it will benefit significantly in the long term.
You Can't Get New Customers without Marketing
And number five, this is really more of a rhetorical question just to think about like, how will you generate leads that turn into customers without marketing? How are you going to do it? Some people may default and go, well, I've got a sales team. My sales team can just jump on and take action that way and we're going to focus more on outbound. The problem with that is that all of your outbound sales efforts are going to be cold. Your sales team is not going to be working with warm leads. And we all know that if marketing on the front end is helping get people to know, like, and trust you and raise their hand when the problem that they have is so great that they need to solve it, you're turning over warm leads that are pre qualified to sales. Your sales conversions are going to be significantly higher. So without marketing, your sales team is going to have to work twice as hard. I think you're probably going to see your close ratios, your conversions go way down. So without marketing, generating awareness generating leads for your business, how are you going to get new customers? And you've got to get new customers if you want to grow. And some of us are going to be losing some customers, you need marketing just to replace those customers.
In Conclusion: Why Marketing Is Critical During An Economic Downturn If You Want To Thrive
So I hope this has been helpful for you. If you do have questions on this, you can always reach out over at rialtomarketing.com. The other free resource we have for you is what we call our revenue roadblock scorecard, which is at revenueroadblockscorecard.com. Over there you can discover and assess which of the nine revenue roadblocks are slowing down your business growth. Takes less than 5 minutes, tons of value. So head on over there. Just want to thank you again for tuning in, watching. I appreciate you and until next time, take care.