The tightening New Zealand economy means that these are uncertain times for all types of business. The ‘R’ word is a regular feature in the media and cash flow worries are keeping Kiwi business owners awake at night. Many of them are reacting by putting a big thick red line through their public relations, marketing and advertising budgets.
However, cutting back on marketing spend during periods of economic hardship is a mistake.
Rather than slim-lining communications efforts, now is the time to start beefing them up. Business owners should be concentrating on maintaining the trust of their investors and customers by regularly touching base with them and letting them know how the company is dealing with the situation.
Many companies have fallen over during past recessions as a result of shying away from marketing and, consequently, dropping off the radar of the media, their shareholders, their customers and their potential customers.
At the other end of the scale, a number of clever businesses that have invested heavily in marketing during poorer economic circumstances have come out stronger than ever and way ahead of their rivals. For example, during the recession of 1990-1992, Procter & Gamble was the only marketer among the five biggest U.S. companies to increase spending in 1991. P&G managed to increase sales and earnings during this period (the late 1980s to early 1990s) and company sales surpassed the $30 billion mark in 1993.
Many business owners aren’t aware that PR is one of the most cost-efficient tools available, which can be a blessing when finances are tight. This value for money contrasts sharply with advertising which can become incredibly expensive, very quickly.
Online public relations is a particularly effective way of squeezing the maximum value out of your PR dollar and is something that business owners can do a lot of themselves. Writing a company blog, participating in business forums and sending out a regular e-newsletter are all simple but effective ways of reminding relevant parties that you are still alive and kicking.
Recessions are a natural part of the economic cycle. The markets, the consumers and the products will still be around once the economy has corrected itself. Business owners should try not to react by cutting out the very tools that could keep their heads above water. If companies are astute and pay attention to how they are communicating, at a time when their competitors are slashing their marketing budgets, they may even come out of the difficult economic period with an even larger portion of the market than when the recession began.
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