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Why You Should Increase Your Direct Marketing in a Recession
By Luis Paez | January 7, 2009
I don’t like to dwell on the current U.S. recession, but it is something that all businesses — large or small — need to think about if they are concerned with growing business this year and in years to come. One of the best ways to plan for your business’ future is to learn from the mistakes of others. In a study of 600 “B2B” companies from the years 1980 to 1985, it was found the firms that maintained or increased their advertising spend during the recession enjoyed significantly higher revenue growth both during and after the recession. Moreover, by 1985 those firms’ sales had risen 256% over that of the rest of the field! (source: MacTech/McGraw Hill Research)
This should be all over the news wires, but I think it’s our American cultural aversion of comparing current circumstance with previous generations that is blinding us. As a nation, we should be open minded about what we can learn from history, especially as it relates to today’s economic challenges. Beyond the B2B space, the major consumer brands should dig deep in their memory banks and recount the late 1980’s with great clarity, as there were some very hard lessons learned during the last major downturn. From MarketSense historical study:
101 household name brands [were compared] during the recessionary period 1989-1991. Jell-O, Crisco, Hellman’s, Green Giant and Doritos saw sales drop by as much as 26-64%. Jiff peanut butter raised ad support and sales went up 57%…
In the beer category, overall spending was down 1% while Bud Light and Coors Light, each spending ahead of the category, saw sales increases of 15% and 16% respectfully.
Pizza Hut sales rose 61% and Taco Bell’s 40% thanks to strong advertising support, with McDonald’s volume down approximately 28%” (source: Investopedia)
These are great case studies of brands that aren’t afraid to look a recession in the eye and have the guts to do what is necessary to rise above their competition. It’s time we spread the word about what U.S. Business can and must do to succeed during a downturn. Clearly, the smart firms will boost their marketing and ad spends during a recession. The brightest of this bunch will utilize a blend of efficient, measurable marketing vehicles, like online ads with conversion tracking, direct mail with trackable PURLs, email marketing, and offer-centric, response-based print ads. Look for future blog posts where I will outline strategies using each of these vehicles.