I have heard the saying and advice that "money is made during a recession" a few different times during my life, but wasn't really sure what it meant. Now going through one of the worst economic recessions in recent memory and having my own business I get to see first hand what that advice means and how it works.
During a recession unemployment rises and incomes fall. Simple economics. Normally this isn't an issue if the average person or business isn't over extended or have too much debt. A family that lives within their means for example can usually survive a short time with one spouse out of work. Businesses are the same way. However what is making this economy particularly bad for both is that as a nation we are way over extended on debt and that goes for both businesses and individuals. With home and stock values falling and unemployment running very high people have to sell things to make ends meet. Bargains are out there.
I know it seems somehow dirty to "take advantage" of people who are desperate, but you need to look at the other side of the coin. This person or business that is selling something needs cash now - not stuff - and while they can't sell whatever it is they are selling for as much cash as they may want, getting no money for it is probably worse. Their economic circumstances actually get better by being able to sell something for cash and you get a good deal. This is happening with houses, stocks, and other things.
So where I am going with this. Well, one thing that also happens during a downturn is that businesses pull back on spending for advertising and marketing. They view it as an expense not an investment; first mistake. During this period all business do the same thing. Those companies that continue to invest in marketing actually get noticed more because so few businesses are continuing to spend that there is less competition against your marketing efforts. In addition, companies that continue to market during a recession can often buy services and ad space cheaper and get a bigger bang for their dollar because they get a larger voice as it is called in the industry. With less competition from other ads the chances their ads are noticed increases.
Those businesses that continue to invest in their growth will not only get a better deal, but also increase their market share. There are still customers with money out there, your job is to find them. Marketing during a downturn helps you do that. Hiding in the hills and hoping for the best is exactly what all of your competitors are also doing. Do you want to be like them or would you rather be prospering? If you chose the later than copying their strategy logically isn't the best idea.
I will repeat how I started this post money is made in recessions. If you invest now you will gain market share, get more for your money, find good deals on both services and ad space and when the economy does turn around you will be flush with cash and new business. Poke your head in the sand and hope for a brighter day tomorrow and you will come out of this with less cash, less market share and weaker business.
Some of the best investments you can make right now is Internet marketing. Also a well written direct response marketing package or online promotion written by an experienced direct response copywriter can have a wonderful return on your investment. If I can help anyone do that please give me a call.
If you happen to be in the Toledo Area there is a fantastic advertising and marketing conference coming up on October 9th, 2009. We have a fantastic speaker, Mark LeBlanc, as the keynote speaker as well as various break out sessions where yours truly will be speaking and presenting on Internet marketing. If you would like to learn more check out the web site for the event.