It may be human instinct to hoard cash in tough times, but it can be a self-destructive one if it means cutting back on advertising and marketing dollars, according to numerous experts and studies.
Here are three good reasons why savvy business people continue to seek out new customers, even when profits are squeezed.
1. History shows advertising in hard times pays off
"Over the last hundred years or so, studies of every recession have shown that if you pull back, you lose market share and investment," said Beth Vendice, president of Advanced Results Marketing in Marlborough.
"Even after the recessionary period, the companies that advertised not only increased their sales over that period, but they came out stronger than the competition that pulled back."
Vendice's company specializes in direct-response marketing, which is designed to get a consumer to take a specific action, such as clipping a coupon, calling a toll-free number, registering on a Web site or anything else that would turn a person into a lead.
"Everything is quantifiable," Vendice explained. "You can see leads generated per dollar spent."
2. You get more for your advertising dollar
This is a buyer's marker for advertising, Vendice said.
"The market is so soft right now, you can take advantage of lots of efficiencies in media," she explained.
In 2009, she said, with a budget equivalent to the one you had two years ago you should be able to increase your reach by 10 to 20 percent.
"There are lots of benefits in being a savvy marketer in this environment," she said.
But just as you are looking for value in advertising, so too are your customers looking for value from your business. You should be emphasizing value-oriented offers and keeping in touch with loyal customers, Vendice said.
"Reassure them about your presence in this economy," she said.