At this point, it’s clear that many businesses will be affected in the long term by coronavirus and COVID-19.
If you’re not already seeing the economic effects of 10 million Americans out of work, consider yourself rare and lucky. For the rest of us, we need a battle plan to confront the coming months.
As someone whose business was bowled over by the 2008 housing crisis, in which I lost 46% of my clients overnight and almost collapsed, I feel confident in saying:
You need to read this.
I have a few free resources to help you manage your business, leads, and financial stability while COVID-19 continues to ravage small businesses nationwide…
I want to SHOW YOU what’s going to make or break your business during this scary downturn.
During the recession of 1990-91:
- McDonald’s cut its marketing budget
- While Pizza Hut and Taco Bell maintained marketing as usual
- Pizza Hut’s sales grew 61%
- Taco Bell’s grew 40%
- And McDonald’s’ sales SHRUNK by 28%
- Cereal manufacturer Post was the industry leader in the 1920s
- When the Great Depression hit in the 1930s, Post cut way back on advertising
- Around the same time, Kellogg’s DOUBLED their advertising
- As the country finally emerged from the depression, Kellogg’s profits grew 30%
- And Kellogg became the nation’s #1 cereal.
All of this evidence was pulled from this Forbes article.
But I also have stories close to home:
I would not allow my husband to cut his marketing in 2008 and not only did he grow, a few of his direct competitors went out of business — one of which he bought for only $5,000.
And I myself bought a competitor — a company we merely printed for owed us $90,000. We forgave the debt in exchange for their customer list and the owner staying on to handle clients with open orders.
There were a handful of my competitors that also fell by the wayside in that time – while I continued to market like crazy.
Was there less for me to take home while I spent my income on marketing? Of course I took a hit personally but I survived and thrived in the long run.
Here’s something else that I found eye-opening:
Back in the early 80s, during another American recession, McGraw-Hill Research — who now publishes academic textbooks — analyzed 600 companies in 16 different industries from 1980 through 1985.
The results were conclusive. Business-to-business companies that maintained or increased their advertising expenditures during the recession averaged significantly higher sales growth than those that cut their marketing.
Just look at the graph they published:
I wanted to show you these examples first because:
I own a marketing company. And I get that any advice on the subject of marketing right now may seem totally self-serving, and I do NOT want to come across promotional at ALL right now.
We’re all hurting and I completely understand that, and what I want most is for as many small businesses as possible to emerge from this downturn as strong as possible.
So, without question, this is the strongest way to safeguard your business during a recession:
You have to continue marketing.
I’m talking before, during and after a recession — this is KEY to how strongly you emerge on the other side.
I didn’t even believe it at one time.
Like you might be right now, I was dubious at best. In fact, I had to learn this the hard way…
PostcardMania hit a frightening wall when the housing bubble burst in late 2007 and ushered in the 2008 recession.
I cut my marketing in 2008.
It seemed like an easy way to save money at a time when I really, really need cash.
And then, in 2009, PostcardMania hit rock bottom, and I almost lost it.
I obviously ended up pulling it together, but not without a $4,500,000 loss and a major learning lesson that you need to know now…
Especially since we’re all staring a recession straight in the eyes.
In 2007, 46% of my clients were in the real estate and mortgage industries. That’s almost half of my clientele.
Flash forward to 2008 when the housing bubble burst, half our clients disappeared overnight and our revenue started to drop…and fast.
But it didn’t get scary until 2009.
That’s when my company really felt the strain from the previous year’s catastrophe.
I was adamant about not laying off any staff, so I consulted with well-meaning advisors on how to handle the fact that our revenue was plummeting with no idea how long this recession would last.
Naturally, when consultants looked at my hefty postcard marketing budget, their reaction was:
Wow, you could save a LOT of money by cutting from that!
I was desperate. I had to make payroll, I was not going to cut jobs, but I needed to stop the bleeding artery that was my bottom line.
So even though I’m the CEO of a marketing company, I cut my own marketing budget.
I didn’t feel good about it honestly but after listening to others, I felt like I had to. And after all —
It wouldn’t be forever. Just a temporary coping mechanism.
How bad could it get?
Well, what happened next, I could NEVER have anticipated…
Incoming leads suffered badly, and our revenue dropped 15%.
Fifteen percent may not sound crazy, but 15% of our $30 million revenue knocked the wind out of me. Suddenly, we were just getting by (barely) paycheck-to-paycheck.
Frankly, there were many weeks I did not know how we’d make payroll.
I cut my own pay by 75% and gave myself a stipend to survive…
Yet our finances remained still a mess.
I remember being so stressed out during this time, in that year (2009) my hair went from jet black to white. In one year.
(Thank god for hair dye!!)
We spent months closely tracking our numbers and leads, and these numbers revealed to me something that I knew instinctively:
Cutting our marketing in 2008 was the core cause of our financial suffering in 2009.
I decided I had to re-up our marketing again to get the leads (and revenue) back up. There was NO way around it.
I did this despite the fact we were, at this point, more than 15% down in revenue.
To be clear:
This email is not necessarily a call-to-action for you to call into PostcardMania and drop money you don’t have.
What I’m saying is this:
Don’t stop marketing your business, however you can.
If you do stop, it pains me to say this but — your business will suffer, and this isn’t just my opinion speaking.
Several studies dating back over the course of a century that all agree:
Maintaining or increasing your advertising expenditure during an economic slump can lead to increased sales both during a weaker economy, and after.
Think about it:
The common knee-jerk reaction to a weakened economy is:
Better cut spending.
I’m guilty too!
But if you maintain your marketing (or increase it, if possible) you’ll automatically be out-marketing your competition who undoubtedly reacted by cutting theirs.
I know it sounds like a jump to say this, but this recession will not last forever.
They never do.
So keeping your business literally in front of your prospects will lead them to you, whether now — or in the future — because YOU are who they’ll remember when they need your service again.
But if you stop marketing altogether?
It’ll be a hard fight to get prospects to remember and call you. (How will they remember you amidst all that is going on? Quarantines! Shutdowns. The threat of more loss.)
Another point is this:
Advertising costs are likely to be lower now than ever before — and this is universal. Take it from me, marketing and advertising agencies also need to keep their businesses going. So keep an eye out for specials, like our own 25% off sale for Easter.
We’re also giving small business owners FREE access to our Virtual Growth Summit event playback. (Just scroll down the page — it’s free business training until April 10th!)
Look, I understand where you are right now.
If paying for ANYTHING at all scares you, let me offer you some inspiration. We’ve been studying the coronavirus impact on small businesses (and documenting a free resource guide here for you)…
And there are some incredible stories of small businesses getting creative and finding solutions to keep serving their communities. Not much expenditure, but a lot of bright ideas to keep the wheels turning.
Here’s a video:
And here’s a success story from Denver’s Vine Street Pub & Brewery about taking their offerings online.
In that same vein, here are more ideas for revenue:
- If you’re a restaurant owner or caterer, switch to a delivery- and carry out-only model that services people at home. Third party delivery apps like Uber Eats and Grubhub make it easy to get started quickly without hiring your own delivery team. Grubhub is currently waiving fees to help restaurants affected by COVID-19.
- If you run a services business that requires person-to-person interaction (HVAC technician, roofer etc.), you can reduce appointment cancellations by letting customers know now that all interactions will be 100% CDC compliant.
- Offer a discount on gift cards to be used at a future date. Let people know that if they purchase a gift card from you in the coming weeks, they’ll save money on future services while helping to support a local small business.
We’re constantly updating our Coronavirus Small Business Impact Guide with similar revenue-generating strategies, in addition to all the stimulus and rescue loans available right now, both from the government and generous companies like Google and Facebook.
Do what you can and adapt.
You cannot survive without business coming in.
I found out after the 2008/2009 recession that, if we hadn’t continued our marketing (despite all the “good” reasons not to), we would have made $13 million less over the last 6 years. Point is…
COVID-19 will not last forever. Your prospects and customers know this too.
Once the pandemic ends, you’ll want to make sure you did what you could to stay in front of your prospects’ eyes because when they have money to spend (even stimulus money), you’ll want and need them to call YOU.
If you’re at home or in quarantine, please take advantage of our FREE Virtual Growth Summit playback. It’s online available to you until Friday, April 10th, and its content is targeted toward helping you navigate this pandemic.
If we can be of service to you during this time, please do not hesitate to contact one of my marketing experts at 800-628-1804. They’re briefed on all resources to assist you, and we are running an Easter Special giving up to 25% off your marketing.
You can always email me directly, too, at firstname.lastname@example.org.
P.S: Remember to bookmark our FREE Coronavirus Small Business Impact Guide — we’re updating it daily with marketing strategies, small business loans, and other vital resources during COVID-19.