With corporate managers under enormous pressure to control costs and maintain liquidity in the current credit crisis, advertising budgets often appear to be a dispensable luxury in the struggle to survive. Executives who succumb to that temptation, however, put the long-term future of their companies at risk, according to Wharton faculty and advertising experts.
The danger in cutting back per Wharton marketing professor Peter Fader:
…[Companies] leave empty space in consumers’ minds for aggressive marketers to make strong inroads. Today’s economy provides an unusual opportunity to differentiate yourself and stand out from the crowd, but it takes a lot of courage and convincing to get senior management on board with that.
Furthermore, per Wharton marketing professor Leonard Lodish, ‘If your company has something to say that is relevant in this environment, it’s going to be more efficient to say it now than to say it in better times.’ Costs are lower and there is less competition looking at long term marketing strategy.
And these views have support in research.
A McGraw-Hill Research study looking at 600 companies from 1980 to 1985 found that those businesses which chose to maintain or raise their level of advertising expenditures during the 1981 and 1982 recession had significantly higher sales after the economy recovered. Specifically, companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise.
I may have taken the liberty to slide in ‘marketing’ in place of ‘advertising,’ as referenced in Wharton article. But the same applies.
When other lawyers and law firms are cutting marketing time and expense, this is when you have to be decisive and plan for the future. If your firm has clients whose business life or growth is at risk, the case for many firms today, spending time and money on marketing is even more critical. You need to developing relations with prospective clients.
At LexBlog, we’re seeing savvy law firms and lawyers making their move in marketing now. Law firms are looking to get a jump on competitors in burgeoning areas such as financial recovery, climate change, and green development. Lawyers realizing that even the largest law firms are not immune from downsizing are looking to establish themselves as thought leaders in niche areas of the law.
It may feel awkward to make your move now, but in running marathons, I always found the time to pour it on was when we were all hurting the most. It was easier to pass the competition and they couldn’t martial the energy to keep up. Feels the same in business.