Making Money in a Recession
Marketing in a Downturn

In a downturn,
marketing budgets
often
get cut first ...

quick fix
It can often be a in times of crisis ...

A Forrester Research
survey of social marketers
in 2008 for example
showed that display
ads, online video, game
marketing and widgets are
the first to go in a
downturn.

Source: Forrester Research

Especially when you
don‟t know how
long it‟s going to last.

Source: WSJ Market Data Group; National Bureau of
Economic Research (recessions)

Yet there is clear and
incontrovertible evidence
increased
proving that
marketing spend
can actually increase market
share

In a 1979 survey
ABP/Meldrum &
Fewsmith found that:
“Companies which did not
cut marketing
expenditures experienced
higher sales and net
income during those two
years and in the two years
following, than those
companies which cut
budgets in either or both
recession years.”

In 1981 – 1982
McGraw-
Hill Research analysed
over 1,000 in 16 different
industries.
The findings showed that firms which
increased or maintained their
marketing spend averaged significantly
higher sales growth, both during the
recession and for the following 3-5
years.

During the 1990 – 1991
recession, Management
Review asked AMA member
firms about marketing spending.
“Fortune follows the brave”, it
announced, noting that the data
showed that most firms that
raised their marketing budgets
enjoyed significant gains in
market share.

that increase
“Brands
{marketing} during a recession
when competitors are cutting
back can improve market share
and return on investment at
lower cost than during good
economic times.”
3 March 2008
Harvard Business
Publishing

If bigger retailers cut
down on their marketing
and visibility during a
downturn, then smaller
competitors can actually
gain market share
because there is less
competition.

During the Great Depression
in the 1930s many successful
companies cut their marketing
and advertising budgets and
some droppedoff the
radar completely.

As a result, customers
felt abandoned by these
companies and interpreted
the cuts as meaning that
the companies weren‟t
good enough to
survive.

Customers gave their custom
to more
visible
competitors, those who
continued to market and
advertise aggressively.

The companies who thrived
were those who continued
to market themselves
consistently and even
increase their budgets.

These are just some of them

Even when there‟s a downturn
in the economy, there are
always opportunities
out there

There are two things to look at:
(1) opportunities for
business growth

(2) marketing activities
which give you ROI (Return
on Investment)

Examine every aspect
of your marketing
budget with a critical
eye
What marketing
activity leads to the
highest income ?
What high ROI
activities do you need
to increase ?
What does each
qualified lead cost?

Source: http://blog.startwithalead.com

The ROI of every Campaign is Cost per Lead vs Cost per Sale
Marketing Campaign Marketing Campaign
Cost Cost
divided by divided by
(Number of Leads) (Number of Sales)
Cost Per Lead Cost Per Sale
(Low Figure vs High Figure)

The Most Important Key Indicator is the
End Financial Performance
Large
Small Number of
Number of
Sales
Leads
Small Amount of
Large
Revenue
Number of
Sales
Large Amount
Small Number of Sales
of Revenue

Relative Value of Marketing Mediums (importance
ratings & results vs budget allocations)
E-mail marketing
Search keyword advertising
Direct Mail
Online non-search advertising
Tradeshow
Telemarketing
Radio
Source: PoliteMail Survey
of marketing and sales
Print
executives
TV

Business Growth
Innovation Private Funds
Competitive Opportunities Profits
Advantage
Marketing
Cash Flow
Business
Takeovers
Loans
Mergers
Growth Venture Capital
Buyouts
Leasing
EU Grants
Management Structure
Ownership Control
Economies of Scale Local to National &
Flotation
Changing Roles National to
International

Innovation
Competitive Advantage
Marketing
- New Market Development
- New Product Development
- Customer Share Expansion
-Acquisitive or Joint Venture Growth
- New Skills Development or Acquisition

Relationships with
customers will
strengthen during a
recession because
competitors will be hoping
to capture them.
Improve your USP.

Revisit your customers‟
“pain points” – find out
what keeps them awake at
night and then work out how
you can help them

Sole traders and small
businesses can take
advantage of a
downturn and grow
because they can
charge less and
are more flexible
than multinationals

Many successful companies
started up or came about
during recessions ...

Microsoft, the number one computer technology
company, was created by Bill Gates and Paul Allen in 1975,
just after the oil crisis in the Middle East hit global
markets. Various strategies enabled Microsoft to achieve
remarkable growth in the competition-laden computer
industry including product innovation, brand extension,
heavy advertising, competitive toughness, and product
expansion.

Fortune, the world-famous global business
magazine, was founded by Time co-founder Henry
Booth Luce in February 1930, just four months after
the Wall Street Crash of 1929 that marked the start
of the Great Depression. It initially targetted wealthy
tycoons, but later was marketed as an intellectual
vehicle for visionary leaders in the business world.

A recession is a good
time to acquire
competitors at reduced
rates ... or (put another
way) go into
partnership with
competitors

Twentieth Century Fox was founded in the
Great Depression of 1935, as the result of a merger of
Fox Film Corporation (founded by William Fox in 1915),
and Twentieth Century Pictures (founded in 1933 by
Darryl F Zanuck, Joseph Schenk, Raymond Griffith and
William Goetz) when Fox was about to be into
receivership.

Unilever was created in 1930 from the merger of
British soap maker Lever Brothers and the Dutch
margarine producer Margarine Unie - a logical merger
as palm oil was a major raw material for both
margarines and soaps and could be imported in bulk
more cheaply.

Then think of new and imaginative ways to market
yourself or your products and services.
Have you fully considered Is there a way you can help
what your potential your potential customers to
Is there a social trend
customers want? visualise the impact of your
which suggests a new
service?
direction for your
business?
Is there an unusual way of
If you were to be more
packaging your communications
aggressive about seeking
or proposal in a way that might
opportunities, who could you
make it stand out?
approach?
Is there a market niche you
Are there any aspects of your
are overlooking because
business that represent value
you felt it was dominated
that could offer to bring in
by bigger competitors?
additional value?

Here are a few real life
examples ...

The monks in the Benedictine monastery , Worth
Abbey in Sussex, needed to find a way to support
themselves.
Abbot Christopher Jamison and Roger Steare, a
London-based business consultant founded The Soul
Gym which offers a series of business ethics courses
aimed at industry leaders.

An advertising agency was on the verge of going out of
business in its first year, so the owner decided to spend
his last few thousand dollars on a party for clients,
potential clients and journalists to say “goodbye” in style.
The party had an unexpected effect. Wanting to be part
of such an obviously successful new venture, several new
clients signed up immediately and for the first time the
firm started making a profit.

Sir Cameron Mackintosh wanted to transfer his musical
“Five Guys Named Moe” from a small fringe theatre to
the more formal West End of London without it losing the
fun atmosphere that made it such a success.
He hired a “meeter and greeter” at the new theatre to
joke with the audience as they came in and the cast led a
conga to the bar at the interval. The show had excellent
word-of-mouth success, and ran for four years.

In 1928, Ward Cosgrove, who worked for the Minnesota
Valley Canning Company, wanted to market a new and
unusually large variety of pea called the \"Green Giant\"
which he had found in Europe.
His agency thought up the “Jolly Green Giant” character
and by the 1950s, it had become so popular that the
company had changed its name to the “Green Giant
Company”.

David Musselwhite, a 63 year old lawyer in
Dallas, Texas wanted to turn the business of law into a
“pleasurable experience” which wouldn‟t scare away any
potential clients. So he set up the “Legal Grounds Cafe”
as part of his office space so that he could help solve
people's legal problems in a non-threatening
environment.

In 1994 Unilever launched the Everyman Project
which sold very cheap soap powder to women doing
their washing in the Ganges. It then started to
promote low cost powder and shampoo in Brazil.
The project gave Unilever a presence in areas
usually ignored by other multinational companies and
it has become a trusted name in those areas with
huge potential growth in the future.

Jim Kirchmeier, owner of the Classic Driving
School in Texas, wanted to attract more teenagers
and students to his driving school.
He bought a fleet of Porsches to make his company
stand out from the competition. It had the desired
effect. Within a year he had doubled his income.

An example of using product line extensions to evolve
a brand was McDonald‟s healthy choices value menu
created in 2004. McDonalds reported a 14% growth
in profit worldwide when some businesses were
struggling to preserve their market share.

Louis Cocozza, who worked for the Harty Press, wanted
to find a way to reach five potential customers who
would never return his „phone calls. He bought a
“message in a bottle” kit and wrote each one a note
saying: “I‟ve been trying to reach you for such a long
time, this is my very last hope”.
The next time he rang, four out of the five customers
took his call. Three agreed to see him and later became
good customers.

Thank you
Merci
Grazia
Danke
Gracias

Sara Paine
Verona PR & Marketing
T: + 44(0)1474 361008
E: sara@verona-pr.com
www.verona-pr.com