How to take advantage of a weak economy

One of the acknowledged effects of a weakened economy – it happens in every economic downturn – is that companies spend less on their marketing and advertising than they do when financial times are good. On the surface, that makes sense – each company has less money to spend overall, and marketing and advertising budgets are more flexible than, say, rent or payroll.

For the really savvy marketer, however, an economic downturn suggests a rare opportunity to make significant gains in market share at a relatively modest cost. Here’s how it works. If your competitors spend – as they have in the past -- about 7% less, on average, for advertising and promotion, your company has the chance to increase its share of voice (SOV) merely by leaving the promotional budget right where it was. And if you can kick a little extra budget into widening the gap between you and your competitors, you may able to make significant gains.

The reason that’s important is a correlation proven decades ago by the Harvard Business Review. A higher share of voice (the sum of all communications aimed at a particular market) results in a higher level of awareness in that market; higher awareness, in turn positively correlates to increased sales, and increased sales result in an improving share of market. Last but not least, the larger the share of market a company enjoys, the higher its profits are likely to be.

If growing your business through increased sales and market share is a goal for your company the current sputtering economy may be a great place to start.

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