Champ Savage is a marketing expert. It says so right on his business card. He has traveled the world bringing ideas to business owners of all kinds, and his accolades are even more numerous than his passport stamps. Now, Savage lends his expertise exclusively to CAR WASH Magazine and its readers.
The economy’s been great lately and I’ve been thinking about putting some additional dollars into my marketing efforts. Some digital campaigns, radio spots, mailers … but I keep wondering if a recession might be looming. Should I be trying to reel in my marketing investment if I think a recession might be on the horizon?
-Nervous in Nebraska
An excellent question. Do you continue to invest in your success, or do you dial it back, so you can be prepared in the event of a recession (large or small)?
You may get mixed responses on this one. But, let’s drop some knowledge from an old marketing fable.
There was once a man who ran a roadside hot dog stand known for miles around. People flocked to the location and for years the business was successful. He eventually got a bigger cart, then opened a retail location. The success of his business was enough to pay for his daughter’s college education. It was a great point of pride for the business owner.
His business flourished, and he was considering opening up additional locations. Then over the holidays his daughter asked if he was sure he wanted to be expanding when everything she was reading pointed to a looming recession.
She suggested he cut back on his expansion plans and consider additional cost-saving measures to ensure he could weather the storm of a recession.
After some deliberation, the man took his daughter’s advice. He reduced his marketing spend, cut back on his employee hours to try and run the operation with fewer resources, and started to think about incremental price increases to bump profit in preparation for reduced customer traffic to his store.
Slowly but surely the man started to see his sales decline. Customer traffic slowed, he had to reduce his hours of operation, and before he knew it, he was selling off his once-successful business.
But there was no recession.
Well, there was, but only for our friendly hot dog vendor. He was so focused on preparing for the worst, that he didn’t take care of his business, and invest in it the way he had when it was successful. The growth mindset he had once so easily lived by had eroded.
So back to your question … should you dial back your marketing investment to prepare for the potential of a future recession?
Not in a million years. With one important caveat: Make sure you have a fully developed plan for the spend, and a way to track the return!
That way, you’re making smart decisions about what’s best for the growth of your business.