In times of economic strife businesses tighten their budgets and brace themselves for the short term by trimming the “fat”. Budgets on promotional campaigns and giveaways often suffer such cuts and brands promote themselves less. But don’t rush to slash your budgets. According to the Harvard Business Review, “failing to support brands” undermines companies in the long term.
“Like a good surfer, you’re going to want to carefully eye the recovery and get into position in good time… to ride the wave.”
Economic recessions might mean that firms have to fight for a smaller demand pool. But economic recessions are cyclical and dynamic. So you shouldn’t just wait for it to happen. As recession turns into recovery demand will increase. But waiting for it to happen will mean the recovery will just pass you by. It is like a bad surfer waiting for a wave to pass him by before getting onto his board. Instead, like a good surfer, you’re going to want to carefully eye the recovery and get into position in good time, so that before the recovery hits you, you’ve already kicked off the processes to ride the wave.
Not a simple on-off switch
In addition to getting the timing right, it’s important to remember that the effects of promotional marketing are not like a simple off-on switch that you can just snap into place whenever you like it. It takes time to build brand recognition and capture positive consumer sentiment. And keeping passive sentiment alive is important also in times of crisis. Keep this in mind when gauging the extent of the budget cuts. Better to keep a certain level of spending going constant even through time of crisis, instead of saving for good times, when the marginal returns might be lower.
Beware of the ‘promote lag’
You also need to be aware of the time lag from the moment you decide to promote your brand. Internal processes take time. This could include anything from marketing research and analysis to internal approval processes required to action a budget spend. As a business leader you’re going to have a pretty good idea of how long those processes should take. All that remains is for you to keep an eye on the expected recovery, do the prep work and time the peak of your promotional campaign accordingly.
Flatten the curve
If used correctly, promotional budgets can help your business smoothen (and sometimes even flatten) its ride as it drives through the economic business cycle. Of course, promotional campaigns can also be fine-tuned to adapt to different opportunities that might be uncovered in the wake of an economic recession. But calibrating the spend to generate consistency will not only help your long-term branding efforts but might also help you reduce fulfilment bottlenecks in good times and excess capacity in bad times.