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Please take the time to leave a comment once you have read the following
article about marketing myths and what you can do about them. Your comments are
greatly appreciated.

In an ideal world, marketing activity would be self supporting, always pay
back multi-fold what it costs to execute, and be effective in reaching every
potential buyer in the appropriate sector all the time. But in the world where
the sky is blue, marketing activities are driven by several factors, including
perceptions of the company and the head marketer there, economic forces that drive
consumer behavior of all types and factors beyond your control.
As a result
of these factors, marketing budgets are at the mercy of the reactions of the
company to these perceptions. Many of these perceptions are flawed, skewed,
marred by history, personal experiences of senior management, and most have no
historical precedent or foundation.
Myth #1 - “Our brand is strong enough
not to need support for the duration of the downturn.”
Fact: Few brands are
strong enough to survive without advertising, product promotion and customer
service support. Brands are like delicate houseplants - they need attention,
support, bolstering, and polishing, (the marketing equivalent of nutrients,
light and water) - or they will wither and shrivel to a shadow of their former
self. This is not a position you want your corporate brand to be in when the
growth engine for the economy revs back up.
Myth #2 - “If we cut back on
marketing spending, we can use the money for other things internally, and
increase the budget when things get better.”
Fact: Studies have shown that
once that budget gets cut, it takes a herculean effort and a strong internal
champion to boost it back to its former levels, and even if it does increase,
there are much stronger conditions of ROI attached to its
implementation. Once those funds are allocated elsewhere, they tend to stay
there - after all, that other department doesn’t want to give them up
either.
Myth #3 - “Nobody’s buying anything, advertising and promotions are a
waste of money.”
Fact: Many studies conducted by prestigious business
publications and university think tanks have come to the same conclusion based
on the data they gathered on U.S. and in some cases global companies: Those that
reduce their presence in their key service markets are in a far worse position
in terms of profitability, market share and market competitive presence when the
downturn eases and profitability growth returns than those that maintain their
marketing activity levels. Those companies that are so bold as to increase
marketing activity stand a great chance of taking market share from their less
aggressive competitors and can rule the category if the downturn lasts long
enough.
Myth #4 - “We can cut back [on marketing] now, and then ramp up
quickly when things get better.”
Fact: This strategy has proven disastrous
time and again, especially for companies that have inefficiencies inherent in
their design, or product delivery channel. That inefficiency won’t allow them to
“ramp up quickly”, since by that very inefficiency they will effectively always
be “late” when timing the market - they are not market leaders but laggards, and
thus the ramp-up activity gets started late relative to the buying cycle, and
their more nimble competitors have already beaten them to the punch.
Myth #5
- “We should examine what’s working for us, and cut out everything
else.”
Fact: This is not really a myth, but a knee-jerk reaction to a
short-term slump in sales gross. Good marketing departments should be doing
exactly that on a perpetual basis, not just when times are tougher. Why would
any marketer worth their pay continue programs that didn’t work, effectively
dragging down performance across the board and wasting money.
In addition,
there should be metrics built into any campaign so that there is a way to “take
the pulse” of its success, and mid-course correction is possible to boost
effectiveness and increase ROI on a continual basis. Further, in some channels,
there is a cumulative effect that blurs perceptions of what’s working and what’s
not - interdependencies exist between channels that are not planned or scheduled
but that live in the customer’s mind and trigger sales inadvertently. Cutting
out what can’t be measured accurately hampers this effect, dragging down results
with no apparent reason.
Myth #6 - “Marketing spends more money than any other
department, they have the most room to cut budget.”
Fact: While spending may
be a measure of power in some corporate structures, at least informally, return
is really what counts when its budget review time. Marketing is one of the few
departments that can actually point to contributions they make directly to the
bottom line. There is a proven cause-and-effect relationship between sales gross
and marketing expenditure for larger and enterprise-size firms. Increased
spending in the IT department might yield long-term benefits, but better servers
don’t often move more product, unless the product is server space. Cutting the
marketing budget only reduces the opportunities available to build market share,
boost product awareness and memorability in the mind of the consumer, and
dampens profitability in the long run.
Myth #7 - “All of our competitors are
pulling back advertising and media expenditures to save money, so we should,
too.”
Fact: This kind of lemming-like sheep thinking can destroy your
company! Your Mom knew better than this when you used the excuse “All the other
kids are going, why can’t I?” and her response was likely something along the
lines of “If the other kids jump off the bridge, are you going to jump, too?”
Despite being competitors, their financials likely look a bit different from
yours, and it’s foolish to think that you can mirror their moves and be
successful - at best you will be equal! The smart money here is being used to
take market share from your more timid competitors, by increasing presence and
exposure, and cutting other less-than-mission-critical expenditures for a short
period to accomplish it.
Bonus!
Myth #8 - “We should downgrade the quality
of our marketing materials, use a cheaper creative agency, and mail out less
frequently to save money.”
Fact: This set of moves will actually cost you
both in the short- and long-term. You might save a very small incremental amount
on cheaper paper, shorter, smaller brochures, cheaper handouts, smaller
tradeshow giveaways - but the damage you’re doing to your brand and the
resulting poor reflection on the company as a whole does far more damage than
can ever be repaired by spending those few dollars later to try and fix it.

Not to mention shaking the confidence of your customers by giving them a
visual representation of how poorly your company is performing! “Gee, they must
be in trouble, this looks like cheap junk. Maybe I’d better take my business to
the other company that’s likely to be around to support their products down the
line,” is the thought you’re promoting by reducing quality in your publicly
released materials.
Good design often costs less than bad design, due to
fewer creative iterations, fewer miscues, greater effectiveness and higher
return. Jumping ship from the agency you’re with if they are delivering on
dollars spent just to save a little money is fool-hardy. The ramp-up time for a
new agency to learn your needs, your products, your style and your brand will
just about be exhausted by the time the average recession is over, and it will
have cost you more to get the same level of productivity in that time, just in
time to reposition for the new economic conditions.
When times get tough, the
tough get going in the marketing department, providing the market with visual
evidence of your corporate strength, your leadership role in the sector, your
expertise in the market, and the supportive strength you offer for your products
and services. Don’t believe the nay-sayers who want to slash your marketing
budget, reduce your headcount and reduce the quality of your materials.
Everything you do here reflects on the health of your company, and cutting here
shows the most and helps the least.

About the Author:

David Poulos, Chief Consultant at Granite Partners has been offering
marketing guidance to firms for over 25 years. Specialties include non-profit
marketing and full-scale strategic marketing campaigns. He can be reached at http://www.granite-part.com, or 410-472-4570.

Technorati Tags: Marketing, Advertising, Recession, Economic Downturn, Budget Cut