Why You Should Maintain (or Even Increase) Your Marketing Investment in 2023

Contrary to popular belief, Entrepreneurs and small and medium businesses should maintain — or even increase — their marketing investments when it seems costs are increasing and the economy is facing a potential downturn.

When an economy takes a downturn, costs are rising and the word “recession” is uttered across the mainstream media, there is often one standard response: cut the budget. For many small businesses, the first on the chopping block is marketing. This is the one area of businesses where results may seem intangible, and owners could assume — at their peril — that slicing away some of the perceived marketing investment will make little difference to the end result. The truth could not be more different.

I recall the world global credit crash in 2008 with mixed feelings. The initial news that consumers and companies were to have access to credit and overdrafts reduced and even worse, removed, was met with gloom…. How could business suddenly finance cash flow, how could consumers suddenly change buying habits from credit cards to cash debits? Demand slowed for many businesses, and when you experience an unforced destruction of demand for your product or service, you have to make a correct decision quickly to avoid the business hitting reverse gear with potential terminal effects.

This is when counter intuitive decisions generally win. Whilst many businesses batten down the hatches and try to “ride it out”, or slash prices and margins to attract new buyers, those that see the situation as an opportunity to refocus their marketing purpose, their message and reidentify which clients to attract, will stand out from the crowd. This in itself maintains your business visibility, and importantly accessibility to buyers in a marketplace that is seemingly less crowded.

In the business I owned at that time, we addressed the “credit crunch” problem, by introducing automated advance monthly payment plans with a low entry level. We shouted about it, we broke down the low risk, free credit proposition without slashing prices, appealing to the habits of the consumer at that time. Online had become crowded and the return on investment was diminishing. So we pushed a Direct Response marketing campaign and communicated directly with our specific audience, away from the crowd. We advertised in more magazines than previously, we supported that with strong calls to actions and followed it up with direct mail. We put ourselves “physically” in front of our prospective clients. Our marketplace competitors all retracted spend, and we were the only company in our niche to divert our investment to offline activities and as the results came in, we invested more. The principle behind this is every business needs more than one route to market. In fact, it’s proven through the time of passage, businesses should have a minimum of seven pillars of marketing activity, so if one or two slow or no longer work, you still have routes to market to maintain the business. It’s not reliant on one or two channels. It’s a continuous evolution. In 2023, there are over 18 different primary disciplines of marketing, so a good strategy is more essential than ever before.

The results spoke for themselves. During those challenging times, we grew that business to report revenues five times greater than the previous financial year. By 2010, we had acquired two competitors who didn’t invest in their marketing in the same way. Sure, we cut some expenditure fat, in facilities we changed suppliers, renegotiated insurance and generally procured better than before, as companies were offering supply deals to compensate for their demand slow down… Where we saved, we reinvested in marketing and we grew.

Continuously analysing your market, your referral process, your advertising, your audience and your services and product is a part of Entrepreneurial and Business Life. It’s fascinating, it’s challenging and it’s satisfying. There are always solutions to problems, and cutting back on reaching your marketplace is not one of them.

About Our Resident Entrepreneur

Originating from the UK, Ian Lucas resides in Marbella, Costa del Sol and has over four decades of business and marketing experience and expertise. He is a multi award winning Entrepreneur and was named in the Who’s Who of Entrepreneurs in 1998 then awarded the accolade Entrepreneur of The Year in 2008/09. Experienced across a multitude of sectors, today Ian’s entrepreneurial spirit is involved in helping and developing Marketing Strategies for Small to Medium Businesses, whilst still publishing titles in the UK and Spain.

If you have any questions and would like to ask Ian about marketing strategies for your business, please email us at info@costalinkmagazine.com in confidence and we’ll pass it on. He’ll share his experience and advice, and in future issues, with your permission, we may anonymously share your questions, Ian’s strategies, hopefully to share and help fellow small and medium business owners across the Costa del Sol.

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