Don’t You Forget About Me
By Angie Ash, EVP
Some schools are going 100% virtual this fall while others are a classroom and online hybrid. More states are mandating masks to walk into any place of business, and the virus isn’t dying down this summer as we all hoped. Restaurants are still struggling, evident by all the banners and signs posted that say, “Hey, we’re open. Curbside is available. We offer DoorDash”, and help wanted signs are in front of businesses everywhere. It’s hard not to go down the rabbit hole of doom and gloom when you think about the long term effects of COVID-19 on, well, everything.
And yet with suffering also comes gain. Many gyms are still closed or only open for outside classes and minor usage indoors, but online sales of Beach Body, Mirror, and Peloton have skyrocketed. There’s nary a hand weight to be purchased on Amazon without a backorder. It looks like working out at home is going to be the new reality for awhile too. Other examples of businesses and sectors that have seen gains include online grocery sales, Amazon purchases (no surprise there), cleaning services, Netflix usage, and e-readers.
The point is, the opportunity is out there for those willing to go after it, and willing to put a creative spin on how to get things done and make sales. Turns out there’s nothing like a pandemic to get innovators innovating. 65% of the Fortune 1000 businesses were “born” during a recession or depression of business.
There are two primary reactions a business can take when faced with a recession, whether caused by a bad economy or, in our case, a pandemic. Those reactions are “flight” or “fight”. If you chose to take flight when COVID-19 hit, you slashed expenses including marketing and advertising. If you chose to fight, you maintained, or maybe even increased, spending in certain areas.
As Henry Ford famously said, “A man who stops advertising to save money is like a man who stops a clock to save time.” We’ve found that the clients who listened to us when we said, “when times are bad, you must advertise” are those faring best. That’s because we remembered what happened in 2008 to those who cut costs. They also lost “share of mind” with consumers. It took them much longer than their time “off” to gain lost ground.
This year, those who fought gained market share when the noise level in the jewelry category dropped as competitors cut off their ad spend. With continued advertising, instead of turning off the water, our retailers were able to rebound faster and some even grew their sales numbers over last year. Which means they’re in an even better position for what lies ahead. That was true back in 2008 and it’s proving to be true now.
A series of six studies by research firm Meldrum & Fewsmith showed that advertising aggressively during recessions not only increases sales but also increases profits. This fact has held for all post-World War II recessions studied by American Business Press starting in 1949. Consumer spending increased in every recession since WWII. Exposing your business to new customers is always a smart move.
Keep these statistics in mind as you approach the 4th quarter. Not only will they help you survive, but possibly thrive as well.
If you want to thrive too, drop a line to email@example.com
When a recession comes, don’t stop advertising
- Interview with Miles Young of Ogilvy & Mather during the last recession in 2009
- The history of advertising during a recession
- How advertising during a recession can preserve your brand