This article first appeared October 13, 2011.
Last night I was listening to a retailer talk about how he is travelling through the downturn. Having faced the 1989 recession, this retailer was very relaxed – he’d been down to his last dollar after that downturn and was in a much more comfortable position this time around.
Here is an entrepreneur who has learned the hard lessons – ensure your cashflow is always protected, ensure growth is profitable and simplify your business as much as possible.
He clearly keeps a close eye on costs, but there is one expense line he will never touch – marketing.
Each and every year, no matter what the economic conditions, he spends 6% of his turnover on advertising and marketing initiatives.
When economic conditions deteriorate, he’s especially careful to ensure the marketing budget is untouched – his competitors will almost invariably cut back on their marketing and when they do he goes on the front foot to grab an even bigger share of the marketing “voice” in his sector.
It’s a great lesson. Start-ups are often tempted to keep marketing costs to a minimum, but increasing or holding marketing spending when your rivals cut back can help you seize market share from them.
Watch for this moment and take the opportunity.
Get it done – today!