If you’re waiting for an outside influence improvement (the economy, new sales cycle, market conditions) before starting your advertising or branding campaign, you risk losing market share and giving the other guy a competitive advantage.

During slow sales cycles, you need a way to fight for every sale out there — exactly what advertising programs are designed to do. Slashing your advertising budget is like putting less gas in your car and expecting to drive even farther.

Here are some tips on staying visible through slow times … and improving your market share.

1. Gain market share during slow times
Think of it this way, when sales are down, should you cut efforts specifically dedicated to increase sales?

Companies that increased advertising during an economic downturn increased market share an average of 1.5 percentage points according to the Profit Impact of Market Strategy (PIMS) study conducted by the Strategic Planning Institute. Companies that cut budgets gained only 0.2 percentage points (from weaker competitors dropping out during a recession). Cutting advertising budgets hurts immediate and long-term profits and brand awareness.

Maintaining advertising during tough times can raise:

• Visibility — When competitors reduce advertising, there’s less media noise. With the marketplace stage to yourself, you get much more attention.


• Market share — You can move past close competitors or further dominate the market by increasing share.


• Top-of-mind awareness — Customers remember you.


• Your image as a winner — You are strong enough to endure despite market conditions.


• The level of customer dialogue — Informed customers are more loyal.


• Service delivery — Added sales bring added service opportunities.

2. Think advertising = investment
During slow times, every company has to contain costs. The big question is WHERE. Sales, human resources, operations, engineering and R&D argue that cuts would reduce production efficiency or cause emotionally painful layoffs. The marketing budget becomes an easy target. Why?

• Categorizing advertising as an “expense” — Advertising is an investment in brand loyalty and future sales. (If your advertising and marketing programs aren’t generating sales, you’re doing something wrong.)


• Inadequately measuring advertising’s ROI — Ask, “What are we getting from our promotions?” Ask, “How can we get more?” Ask, “Where can I invest wisely?” Remember, promotion doesn’t just mean magazine ads — it also means direct mail, trade shows, your Web site and more. ALL of your marketing efforts should provide a demonstrated, measurable return.


• Not leveraging the power of your brand — Factors other than advertising (sales, customer service, etc.) contribute to your overall brand image. Marketing aligns your brand internally as well as externally. Without these other factors contributing, you’re cutting the only activity that reinforces all your brand efforts.

Cutting a communications budget guarantees that an under performing business will continue to under perform.

3. Rocket out of slow times
Maintain or increase your communications efforts during slow times and you’ll emerge stronger and achieve more when things pick up.

The PIMS study showed a direct link between market share and the amount of marketing businesses do. Companies that are more visible than the industry norm sell more during the years following a recession. Those that advertise below the norm sell less after a recession. The PIMS study showed:

• Aggressive marketers achieved an average 0.2 point gain in the recovery period.


• Budget-cutters lost an average of 1.0 point in market share.


• Overall, the aggressive marketers outperformed the average of all businesses by almost 250%.

Stay the course and you will come out of slow times faster and healthier than your competition.

4. Decide what to cut
Cutting investments that create demand and deliver customer service isn’t a solution. In fact, there’s greater need during tough economic times because customers pay even more attention to their spending.

Evaluate every business function — sales, operations, engineering, marketing, etc. — according to:

• Whether they contribute to and are consistent with your brand.


• Whether they contribute to a great customer experience, because delivering a superior customer experience is vital in any economy.


• Whether they bring long-term results or just quarterly ones. Keep in mind that advertising is a tactic to achieve steady, calculated, long-term growth.

When you view cost-cutting this way, decisions on which areas to cut become clearer.

“Cutting a communications budget guarantees that an under performing business will continue to under perform.”