Jeff Paro is a marketing and
digital technology coach. He is the owner
of Sticky Marketing Systems and a Duct Tape Marketing Coach.
He has 15 years of sales and
marketing experience both, in corporate
In addition, he was a top speaker
and peak performance strategist for the famed success coach Anthony
Robbins. Jeff has ran training workshops
and given presentations for over 500 companies including many of the top fortune
500 companies.
Jeff has worked for and with many
top industry experts like Anthony Robbins, Chet Holmes, Roberto Monaco, Steven
Marshall, Niurka, Dan Lier, Gene McNaughton and many others.
He holds a B.A. in Finance as well
as one in Entrepreneurship from The University of Arizona.
There is no arguing that we are facing a down turn in our economy, I’m not ready to call it a recession yet, but we are definitely feeling the pinch. That is the nature of business-it goes in cycles of ups and downs.
When the market slows and sales start to drop, owners’ first
instinct is to cut their costs. One of the first to be slashed is the
marketing/advertising budget. Ad budgets are often at the top of a
cost-conscious small business owner’s hit list because it’s an easy
decision to make and it has an immediate impact to the bottom line.
This is a grave mistake. Smart business owners know this is the time to spend more!
Let me explain. When the economy shrinks it tends to shrink as a
whole, meaning that people are still buying there are just less of
them; the pie has shrunk. If you currently own say, 3% of your market
and if the total market is $300m then your sales are $9m.
During a slow down let’s say that the market potential has shrunk by
50% to $150M, assuming you are continuing to do the same income
producing activities (marketing, sales, promotions ect) your sales
should be $4.5M. I know, as an owner that is scary because your sales
on that marketing budget has gone way down and your instinct is to cut
budgets, sit back and “wait for it to turn”.
What you do at times like this really depends on how you view
marketing. Is your marketing viewed as an expense- something you just
have to do? Or do you view it as an investment?
Smart marketers know that while all the competition is standing on
the sidelines, if they have the audacity to actually spend more
(invest), they will capture more of the market share(because
competition is waiting) and when the markets turns around they will
reap the huge benefits because they have a greater market share and the
pie is now bigger.
So in our above example if you were to get just 2% more market
share, which would be 5%. When the economy recovers and the market
value goes from $150MM to $300MM your sales would grow and now be $15M.
When is the best time to buy in real estate? When the market is
down. When is the best time buy stocks? When the market is down. The
same principle holds true for small business marketing.
There is no arguing that we are facing a down turn in our economy, I’m not ready to call it a recession yet, but we are definitely feeling the pinch. That is the nature of business-it goes in cycles of ups and downs.
When the market slows and sales start to drop, owners’ first instinct is to cut their costs. One of the first to be slashed is the marketing/advertising budget. Ad budgets are often at the top of a cost-conscious small business owner’s hit list because it’s an easy decision to make and it has an immediate impact to the bottom line.
This is a grave mistake. Smart business owners know this is the time to spend more!
Let me explain. When the economy shrinks it tends to shrink as a whole, meaning that people are still buying there are just less of them; the pie has shrunk. If you currently own say, 3% of your market and if the total market is $300m then your sales are $9m.
During a slow down let’s say that the market potential has shrunk by 50% to $150M, assuming you are continuing to do the same income producing activities (marketing, sales, promotions ect) your sales should be $4.5M. I know, as an owner that is scary because your sales on that marketing budget has gone way down and your instinct is to cut budgets, sit back and “wait for it to turn”.
What you do at times like this really depends on how you view marketing. Is your marketing viewed as an expense- something you just have to do? Or do you view it as an investment?
Smart marketers know that while all the competition is standing on the sidelines, if they have the audacity to actually spend more (invest), they will capture more of the market share(because competition is waiting) and when the markets turns around they will reap the huge benefits because they have a greater market share and the pie is now bigger.
So in our above example if you were to get just 2% more market share, which would be 5%. When the economy recovers and the market value goes from $150MM to $300MM your sales would grow and now be $15M.
When is the best time to buy in real estate? When the market is down. When is the best time buy stocks? When the market is down. The same principle holds true for small business marketing.
Have courage and think strategically. Up your marketing spend in this down market. Invest in the longer term growth of your company.