Marketing in a Slow Economy

Filed in Aftermarket After Hours

I heard a great expression the other day: “Smooth seas don’t make a skillful mariner.” Though it had nothing to do with our current economy, it certainly got me started thinking about it. The slow market is rapidly, and brutally, illustrating the difference between the strong and the weak. Those that remain positive and resourceful will weather this storm, those that aren’t will likely knuckle under and succumb to it.

A weak economy certainly has a way of making business owners panic, but that’s the worst thing any of us can do right now. Panic causes illogical thinking and irrational decisions. When things slow down, it’s common to see business cut back hours and/or layoff employees, reduce inventory and the like. But I see too many businesses cut back on their advertising and marketing budgets, which is the last thing you want to do. When business slows to a crawl, it’s easy to become focused on the amount of money that’s coming in, versus what’s going out and think, “Why am I spending all this money on advertising and marketing when it’s not doing any good?” What I think a lot of people fail to consider is where their business would be if they weren’t advertising and marketing at all. Instead of being slow, it would probably be non-existent. When your customers and/or consumers stop hearing about you, they automatically assume the worst. And no one wants to board a sinking ship.

I’m going to use GM as an example here. Everyone knows its sales are slow and stocks are in the toilet, but have you seen its ads slow down? If anything, I think they’re getting more aggressive. In the current issue of Car and Driver, they’ve placed an 8-page, four-color insert. According to Hachette Filipacchi Media U.S., the company that publishes Car and Driver, a one page, four-color ad in the magazine costs $173,157 for a one-time insertion (Source).

Even on a 12-time insertion rate, you’re looking at $140,252 per page. So, that ad likely cost GM more than a million dollars to place, even with special discounts. And that’s nothing compared to what they are spending on television ads, event sponsorship and the like, all while losing billions each quarter. How can they afford all that advertising? The simple answer is, they can’t afford not to. Bad times don’t last forever, and once you lose brand recognition, it can take a long time to get it back.

Obviously, small companies in the aftermarket don’t have the resources to step things up when things slow down, but my point is, you shouldn’t stop entirely. You can reduce the size and frequency of magazine ads, participate and/or advertise in enthusiast forums, and continue to distribute press releases to the media. These are cost effective ways to promote your company without spending additional cash. You should also stop to consider ways to promote your company through your website—load additional content such as instructional/lifestyle video, promote any events you’ll be attending, etc.

If there’s a positive thing about a recession (oops, did I just say that?) is that if forces all of us to think more creatively. When traditional methods don’t work, try non-traditional methods. For example, one of our clients is putting together an event to draw more local traffic to their shop. They’re presenting clinics, games, giveaways and more. To make it more interesting, they’re involving other local companies, like a local butcher who’ll have a barbecue, and a suspension company that is donating a lift kit. They’re going to have a local radio station do a remote broadcast from the event, and all of the companies involved are pitching in to help absorb the cost. Will that one event turn business around? Perhaps not—but continual and varied efforts will. When people have a positive experience with your company, they see that you’re not giving up, it gives them hope as well.

And there’s more reason to look forward to a brighter future. As of this writing, oil prices have dropped below $116 a barrel, down from $145 just a month ago, and stocks have surged as a result. Momentum is a funny thing—when things are going up, they continue to go up until something turns them the other direction—in this case, a stronger dollar and reduced demand for oil. I have to laugh at all the “experts” that predicted oil would hit $165 a barrel this summer; they’re not taking the buying habits of themselves, or anyone else into the equation. I don’t know about you, but I’ve been driving my truck a lot less lately and carpooling with my wife. Others are doing the same. Small car sales have increased, and scooter sales are off the charts. That’s a huge reduction in demand, which is effectively reducing cost. And guess what? Once the oil companies lose those customers, they’re not getting them back.

We’re not out of the woods just yet. But with oil prices down and stocks going up, the future looks brighter already. The aftermarket has seen tough times before. If we can all hang on until next year, our industry will be stronger and more resilient than ever.

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