In the midst of a slow economy, the first reaction of many businesses is to decrease or stop their advertising entirely to reduce expenditures and stay afloat. However, doing this is one of the worst things you can do; advertising during a difficult economy is critical to help bolster sales and increase your bottom line.
Advertise to Gain the Competitive Advantage
Studies have shown that advertising during a sluggish economy can give you the upper hand with your competition, since it shows your commitment to your products and services and helps you stay at the top of buyers’ minds when they are ready to make purchasing decisions. During this time, making it a point to stand out is essential, so it can help to think of some ways to differentiate your company in your advertisements. Perhaps you offer a product someone else does not or you provide better customer service. Whatever you do, it is important to distinguish yourself.
According to a study by McGraw-Hill involving 600 industrial companies from 1980 to 1985, businesses that maintained or increased their current levels of advertising through the 1981-82 recession actually achieved sales growth between 16 and 80 percent during the recession years compared to companies that decreased or eliminated their advertising efforts. Even more importantly, the gains achieved during this recession were permanent and actually expanded during the three years after the recession. By 1985, the sales of companies that advertised aggressively during the recession had increased 256 percent compared to those that did not keep advertising.
There is understandable hesitation to be the first to risk advertising dollars during difficult economic times. However, research shows that taking the initiative to promote your business in a slow economy can help your company gain the competitive advantage and ultimately increase your profits. In the words of Henry Ford, “the person who stops advertising to save money is like the person who stops the clock to save time.”