Why should you vamp up your business during a recession? The easy answer - because your competition is slowing down and cutting back. It will cost you less money to take a piece of their market share.
Look at it this way.... If your competition spends 100K on advertising and 50K expanding or improving their services when the economy is good to compete you will need to spend the same, to take a piece of their market share you'll need to spend more.
If your competition has cut back to 25K on advertising and $0.00 on expanding or improving their services then it will cost you 50K in advertising to have a dominate presence in the market place and an image of being the leader in your area. Your competition will loose top of mind awareness and may have the image of being in financial trouble.
The other plus is that it will cost less for the same ad size or radio spot. Supplies and labour will cost less. Even if the market share has shrunk by 30%, there are still customers who need your business - will they find you? Even if you just maintain your profits from the previous years, you have taken some of your competition's market share and by the time they figure out the market share is growing again you will have secured it.
For example lets say the market share started shrinking in August 2008 and your competitor started reducing their advertising, marketing, and services to save money on November 2008. You continue to advertise and invest in your business during this time, your profits go down in the short term but as you stay at top of mind in the market place you start getting new customers. In February 2009 the market place starts to recover and more people start looking for your services and your advertising is everywhere. In June 2009 the media finally says the market is recovering and your competitor starts to sign advertising contracts but these ads don't hit the market place until July 2009. Those customers who started buying your products or services from February to July will have seen you as the dominant player in the market place and your competition has lost opportunities.
Does this make sense? Let me know what you think about what businesses should be doing during a recession.
