Cutting Back…or Charging Forward?
February 12, 2009
Business is slow; revenues are down; and people are panicking. But it doesn’t have to be this way. Consider this excerpt from an article I just saw in our local paper:
A Raleigh advertising agency, founded nearly 25 years ago, has filed for bankruptcy protection and on Friday laid off 15 employees. As the recession worsens, they have seen a “significant reduction in our clients’ marketing budgets for 2009,” said their CEO. Clients also are putting off longer-term projects. “There was not enough to keep us afloat,” he said.
Why is the advertising agency filing Chapter 11? Why are their clients’ budgets being slashed? Why are they putting off longer-term projects? The answer is simple: fear.
You see, when the economy starts looking grim, businesses respond with the first knee-jerk reaction that comes to mind: cutting expenses. I used to see this all the time in my previous corporate life. Times are good? Hire like crazy and train everyone. Revenues slowing? Immediate hiring, training, and spending freezes across the board – without considering any strategic spending that might actually help bring the company through the difficult patch.
This same thing is happening in businesses today: “Recession! Arrghhhh! Run for the hills!!! Cut spending! Lay off everyone! Stop advertising!” This is both wrong and dangerous for three reasons:
- It’s pure reaction without any thought. When a crisis hits, it’s always best to think through different scenarios and, more importantly, to consider counterintuitive, outside-the-box options before taking the path everyone else is following.
- It puts you in a “scarcity mentality” where all you think about is avoiding more losses instead of focusing on creating more revenue. It’s the same thing that happens when professional sports teams start playing to “protect the lead” – they almost always squander the very lead they’re trying to protect by focusing on “avoiding loss” instead of “achieving victory.”
- It overlooks the HUGE opportunity that exists in marketing today: less competition for attention. Think about it – if everyone else is cutting back on marketing and advertising expenses, then there are fewer letters and post cards being sent, fewer ads being run, and fewer web sites being updated and managed correctly. All of which spells opportunity for the few brave souls willing to step up and strategically move into this vacuum.
Are you going to follow the pack or blaze your own trail? Target specific market segments; develop irresistible offers; measure response and effectiveness, and you can not only survive, but actually thrive – even in this economy.
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