Recession 101: Spend more to save your company…wait what?
In tough times small business owners are fearful of losing their businesses, and they’re willing to do everything to save it. But if we told you to actually spend more during a recession, we would probably be expecting something along the lines of a glass vase or some other object dramatically shattering against a wall near us. The truth is, however, that there must be a balance between spend and save, especially during a tough economic climate. Balancing a budget, redirecting company resources, or just spending less money on that TiVo your office desperately needs – call it what you want, here are a few tips.
Simply put, do what must be done to save money! In order to give your company a chance to survive, there has to be some corner cutting, perhaps even some massive shredding. Take a careful look at all of the business expenses, and try to reduce spending on what isn’t necessary or cut it out altogether. Although this seems like common sense, some companies refuse to give up their company Starbucks fixes. And although most devices are becoming wireless for more portability, buying desktops over laptops can save a huge wad of cash. Reviewing the inventory is a good idea as well, as some businesses like to order a gazillion pads of Post-It notes and leave them to collect dust in the closet. Even saving on small things as that will make a difference in the long run.
Here comes the slightly confusing part. While you’re out trying to hoard each paperclip and ball-point pen, increase your marketing spend to as much as possible. Say what? You’re crazy. Who in their right mind would do such a thing? Yes, you’re right; it may take a person who isn’t exactly all there to invest in anything at this time. But it does make sense. Other companies are trying to save money by cutting their advertising, which means there’s less clutter in the marketplace. Less clutter equals more potential to reach a customer who isn’t completely overwhelmed by the amount of advertising they see daily. Keep careful tabs of how much you spend and how much return on investment you make. If there is some advertising that’s only wasting you money, get rid of it fast.
And don’t just focus on one type of advertising, either. Aim towards the types that bring the most Return on Advertising Spend, such as paid search and search engine optimization. Ask your advertising agency if they offer discounted fees with a signed commitment. Companies use this strategy because usually they’re confident they can achieve positive results without having to worry about a client suddenly dropping. Even yours truly, Leverage Marketing, utilizes such techniques. By contracting these types of agencies they become your partners, and partners are mutually dependent on each other’s success. That is, in the end we want you to succeed just as much as we want our own companies to. – AL