Should you be spending money on marketing during a downturn?

A study showing the long-term benefits of maintaining an advertising presence during a recession.


There's no denying it, small businesses are having to rein in their costs, thanks to the current economic climate. What does that mean for marketing? Should business owners be cutting that too?

The answer partly depends on whether you consider marketing to be an expense or an investment. Related to this is whether or not you're measuring the results of your marketing. If you can measure it, do so. If you can't, how else are you justifying the expenditure? Ask not what will happen if you do spend £XXXX on a new brochure, website, display ad, directory entry, PR event or whatever, but what will happen if you don't. Not just 'are they cost-effective?' but 'are they effective?'

This question of measurability is key, and it's something that marketers traditionally have always hated. Accountants slashing their budgets, stifling innovation and growth. Marketers believe you have to invest in creative marketing in order to create a competitive advantage. I'm a marketer myself, and I do think it's short-sighted to make swingeing cuts in marketing during a downturn, however tempting, because marketing now is an investment for the future. Nevertheless, there's no point fiddling with marketing while the business burns. The idea is to market smarter – DON'T drop all marketing but DO question every pound spent, keep any eye on the results and stay flexible. Then marketing pays its way and nothing is wasted.

For example, a mail order firm used to send out its sixty page brochure twice a year, with smaller versions in between. Instead, they took the decision to send only one brochure a year and in between times send frequent email updates, attracting customers to their web store. The money saved in print, design and distribution costs was significant, even after the business reallocated budget to the email updates and improving website visibility.

It can be the small changes that make all the difference: halve your print advertising and put the money saved into getting your website found in searches, reconsider those annual directory entries – do they actually bring in business or are you just in them because everyone else is? Look at ways of retaining existing customers and cross-selling rather than focusing solely on getting new customers. Measure what you can: conversion rates, click-through rates, cost per acquisition... it's amazing how many businesses know nothing about their website performance except the number of 'hits' it gets. And most importantly, respond to changes and make the most of any opportunities. We all need to stay on our toes.



Robin Houghton of Eggbox Marketing is an online marketing specialist and author of eTips: monthly marketing advice and ideas for small businesses. Sign up at eggboxmarketing.co.uk/etips.

Time for some networking

Business networking, love it or loathe it? If you're groaning already, I promise this won't be a thinly-veiled promotion for a membership association. But here's the thing. Businesses are having a hard time of it right now and when the going gets tough, like it or not, the tough get networking.

I have a bit of a Jekyll and Hyde thing about networking. On the one hand, I absolutely believe in the principle of it – people do business with people not other businesses, it's not who you know it's who knows you, blah blah.

But I also acknowledge there's something contrived about getting together with the sole purpose of doing business, whilst going through the polite motions of small talk. All that bonhomie with complete strangers, awkward sales pitches and 6am starts - is it quite, well, British? Even my local chamber of commerce seems to view the idea of members promoting themselves to each other as positively grubby.

For my own part, I've done the formal business breakfasts, the informal get-togethers and quite recently had a taste of speed networking. What works? It depends on many factors, not least of all your personality, the type of business you are in and the make-up of the group you attend.

When considering the more formal membership groups, the two biggest issues to square are the cost (both of joining initially and the regular meeting fees) and the time commitment (often every week, with no time off for good behaviour.) In my experience, those who are almost guaranteed to do well in these groups are in 'commodity' businesses (something that most people will always need, like stationery suppliers, accountants, solicitors). They also suit outgoing types (although if you are on the shy side it can build up your confidence about standing up and speaking to a group, for example). The focus of this kind of group is on getting sales leads for one another, so although the time commitment may seem high there is a full agenda at each meeting and no time is wasted.

However, if your business is something more unusual, or your market somewhat niche, or if you have a strong aversion to smiling brightly at 7am, speaking in public or adhering to rules, you will probably be happier with informal networking. Turn up if you feel like it, wear what you're comfortable in, talk to who you like, have a drink and if you hate the hard sell, just be sociable.

Of course, even informal business networking carries its unwritten rules. Don't talk about yourself all the time, for example – far better to turn the spotlight on the person you're talking with. American business etiquette consultant Phyllis Davis offers many useful tips.

A word of warning though: it's a bit like brushing your teeth. Once or twice a year and you may as well not bother. You may not go to every meeting, but try to get along as regularly as you can, because it's the repeated, regular contact with people over the long term that seems to really bring results.



Robin Houghton of Eggbox Marketing is an online marketing specialist and author of eTips: monthly marketing advice and ideas for small businesses. Sign up at eggboxmarketing.co.uk/etips.