If you own a business during a recession, are you going to cut marketing expenses or keep them going? Just like in budgeting, to make money, you either earn more or you reduce your expenses. Either way, the cash outflows should be smaller.
In this recession, the money that is circulating is definitely less. The first reaction is to cut the budget by marketing. However, some companies have not cut their ad spending. Much like a paradox, what they have done is actually the opposite.
They have maintained and even increased their marketing budget. Some of these companies saw opportunities in a recession. Those companies that continued to spend on advertising increased their sales, dominated the market or innovated in the sector.
Here are a few companies that have beaten all the odds during a recession.
1. Papa John’s
Have you ever heard the adage that you don’t take your foot off the gas pedal? If you do, it will only slow down your opportunities (to win).
Papa John’s is an example of a company that has increased its marketing budget by investing in new kitchen equipment such as dough dryers. They also increased productivity by reviewing and making adjustments to how employees can prepare pizza faster.
Besides increasing productivity, their marketing department has taken its time to shine with the rollout of Papadia Flatbread Quesadillas, Stuffed Crust Pizza and Shaq-a-Roni Pizza. The Papadia was presented last January and delivered strong sales growth of 21%.
Without any sign of stopping the commercials, Papa John also continued to practice ‘fortress‘or create more locations close to each other, shorten delivery times and fulfill more orders.
Out of sight out of mind. During the Great Depression, Post was the number one choice for ready-to-eat cereal. However, they have reduced their ad spending. As a result, Kellogg’s doubled its advertising budget and people started seeing more of Kellogg’s.
“Never miss an opportunity like a good recession.” – Jack Welch.
Sometimes an existential crisis can bring out what is really important. You might have that mother-in-law who turned sweet after surviving cancer or a parent who kicked her lazy 50-year-old daughter out of her house after having a heart attack.
For Airbnb, the existential crisis that brought clarity was COVID-19. After a historic plunge of 72% in April 2020 Compared to the previous year, Airbnb finally recorded a gross bookings increase of 1% in June 2020.
During this pandemic, the marketing team was on fire, focusing on how to improve cash flow. After hundreds of brainstorming and analysis, Airbnb is now seeing revenue.
How did they do it?
Airbnb has returned to its core business – host and deliver experiences. Investments that had nothing to do directly with this core business were reduced. Due to travel restrictions, rental of local stays has surged. In addition, marketing introduces Online experiences, which turned out to be a success.
4. Burger King
However, with a high probability of being infected with COVID-19 through contact, Burger King has introduced two restaurant designs with a 100% contactless experience. Using the Burger King app, customers can park at the restaurant and have food delivered to the curbside pickup areas.
Because experts see the COVID-19 virus coming back steadily despite the vaccine and declining cases, many have said these types of innovative restaurants would be the most appropriate. And addressing the three issues mentioned, this contactless setup is effective. More importantly, he is facing the post-pandemic world head-on.
Who doesn’t know KIndle? How can you forget how Amazon sales grew during the 2009 recession? Profits rose to $ 199 million, 68% more than the same period a year earlier.
New Kindle products were introduced in 2009, helping to generate more interest in eBooks than printed books. Kindle products have become Amazon’s top-selling item across all of the website’s product categories. As a result, sales increased more as Amazon has become known as a company offering lower cost alternatives.
This forties, Asos has adapted quite effectively. The world’s largest online-only fashion retailer has put the spotlight on exercise and loungewear, including some gadgets for remote work. New clothes focused on these two niches are introduced almost every week, offering diversity to shoppers twenty years and older. As a result, sales increased, with a quadrupled upward peak in profits.
In October of last year, its customer base soared to 23.4 million, adding another 3 million buyers to its already delusional customer base.
Additionally, Asos is known for their agility in delivery and returns, and they still practiced this strategy. In addition, the company purchased the Topshop, Topman, HIIT, and Miss Selfridge brands earlier this year.
Many establishments have closed due to the pandemic, but not Uniqlo. On the contrary, the Japanese casual clothing giant has even increased their numbers, including a larger interactive space and a combined store and museum in Tokyo.
Their marketing and design team must be in the new cloud as sales have recovered during the pandemic. The Uniqlo mask with its breathable AIRsm fabric took off, the item being the hook or the inspiration for visiting stores.
Fearing a drop in revenues, businesses in times of recession typically cut back on marketing spending. As in 2008, advertising spending in the United States decreased by 13%. However, there is some evidence that even in times of recession, some brands are doing well after all.
“A man who stops advertising to save money is like a man who stops a clock to save time.”
– Henry Ford
Times are different. Current technology ensures that we can still see and hear advertisements digitally. Unless your sales drop or your business is bleeding profusely, it doesn’t make sense to stop marketing. Remember that while people can see or hear your product, more often than not – they will buy it.
Posted on June 7, 2021