These are stressful times we’re experiencing in the travel industry.
When the inevitability of a business slowdown is in sight, most companies’ first reaction is to cut spending. Often times, the first tranche of decreased funding is at the expense of the marketing department.
The Wildebeest team has seen it many times – on both the agency and client-side – and we get it.
Customers are fickle.
Cash flow is tight.
Investors and executives still expect results.
However, as history shows, it’s sometimes the companies that zag when others zig that end up weathering a downturn the best.
Whether a recession or a global health crisis, here are seven reasons to maintain marketing spend during a downturn.
- Reduced marketing spend most often leads to reduced forward revenues. During the recession of 1990-1991, McDonalds decided to slash its marketing budget. Yum Brands, owner of Pizza Hut and Taco Bell, took the opposite approach – actually increasing spend to fill the void. In the year that followed, Pizza Hut and Taco Bell saw sales increase 61% and 40%, respectively. McDonalds? Their sales dropped by 28%.
- You can outsmart your competition. Everyone’s first reaction is to pull back. If you’re among the few wise contrarians to maintain a steady course, your share of voice will naturally increase. Share of voice is usually followed by share of wallet. When the noise level in the marketplace drops, it’s the perfect time to be heard.
- SEO and content marketing are medium-term channels. There’s a saying among SEO wonks: the best time to create your SEO strategy is yesterday. The second best time is now. This can be the perfect time to kick off multi-phase projects such as technical SEO audits and on-site content gap analyses. Do it now, and then see the returns in the future when search volume, and business, picks back up.
- Brand marketing creates emotional bonds with customers that outlive crises. Don’t ignore your brand – the companies that whether this temporary setback will be the ones with the most powerful stories to tell. This all starts with understanding your brand’s positioning and personality so you can clearly communicate important messages to customers.
According to Harvard Business Review research: “The stock prices of companies with strong brands, such as Colgate-Palmolive and Johnson & Johnson, have held up better in recessions than those of large consumer product companies with less well-known brands.”
This can be an emotional time for marketers in the travel industry, as well as our customers. However, this may also provide opportunities for brands to connect on an emotional level with these same customers. Messages like ‘we’ll still be here when you’re ready’ can be uplifting and will resonate far beyond any single campaign.
- Your sales cycle might be longer than this temporary downturn. If you’re in b2b sales or marketing, such as SaaS, you already know how long sales cycles can be. Pausing or drastically reducing your spending may impact your sales funnel far beyond this temporary downturn.
Some products and platforms take many months to sell into various client stakeholders. Maintaining a steady stream of thought leadership and publishing frequent content pieces ensures your business development team a solid funnel of leads to work through while this downturn subsides.
- Timing is everything. You can’t predict when certain destinations or sectors will once again be in demand. By remaining in the market, you will be better positioned to capitalize on the upswing versus your reactive competitors. Again, the comparison to the stock market helps – if you’re trying to catch a market rally, you’ve already missed it. The news cycle is faster than ever. Be ready!
- This is only temporary. No matter how challenging it might currently seem, this temporary setback will pass. We’re all feeling some pain right now, but the travel industry is resilient and always bounces back!
Recovery likely won’t come all at once, but rather in phases based on region, industry sector, and other factors. Keeping a cool head and a long-term view can help ease any temporary worry. However, while it behooves most companies to maintain their marketing spend, there are some cases where reigning it back may make sense – like if you’re an airline that only serves affected areas.
Going back to the basics of sound organic marketing and branding tactics are often the strongest strategies during a downturn.
The Wildebeest team is here during this challenging time to offer insights and strategies that help your company navigate through the uncertainty.