13/02/25 5 Minute Read

Why marketing matters more than ever in today’s economic climate

Right now, businesses across the UK are facing some of the toughest financial conditions in a long time. That’s down to a variety of factors, from rising costs to shifting consumer confidence. And when times are tough, it’s natural to start looking for ways to cut costs. However, while it’s never a bad idea to review budgets, take it from us – cutting back on your marketing could mean getting a smaller piece of the pie. And right now, with fewer people spending, that pie is already smaller than usual.

Here’s the thing though: if fewer competitors are marketing, you still have the opportunity to maintain your profits, or at least something close to it, even during a recession. The key to having your cake (or pie) and eating it too is actually maintaining your marketing efforts, which positions you to capture a larger share of that shrinking market while others retreat. And when they return, and the economy evens out, you’ll be in a prime position because you’ll have weathered the storm while others stepped back.
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The economic pressure facing businesses today

It’s no secret that many businesses across the UK are struggling right now, with insolvency specialists reporting a record rise in companies facing financial distress. From just September to December last year, the number of businesses in critical financial trouble surged by 50%, reaching 46,583– the highest figure since records began in 2004, and a significant increase from 31,201 in the previous quarter. Overall, the number of businesses facing financial difficulties grew by 3.5%, bringing the total number to a slightly worrying 654,765.

So, why is this happening now? Well, there are a few different factors driving this economic pressure. These include:

HMRC’s focus on tax collection. The authority is now pursuing a policy of stricter enforcement on overdue taxes, so your business might be facing increased financial strain as a result.
Rising national insurance and minimum wage. The recent increases have added significant costs, especially for labour-intensive industries, making it harder to break even.
Higher operational costs. From energy bills to supply chain expenses, overheads are climbing across the board – which may already be having an impact on your bottom line.

Experts say that industries like retail, hospitality, and construction have been hit the hardest, but no sector is immune. Even businesses that typically weather economic downturns well are feeling the pressure.

Why your marketing is valuable in tough conditions

When you work hard on your marketing, your marketing works hard for you. In difficult economic conditions, a solid marketing strategy and digital presence can be vital for bringing in new business. What’s more, rankings and trust with both Google and your audience take time to build, and losing ground could put you back at square one, making it harder to regain visibility. If you cut back now, you’ll be at a disadvantage when the market picks up and your competitors maintain or increase their marketing efforts.

We understand the temptation to reduce marketing spend, especially when trying to manage costs – but it can have a major long-term impact on your business. Cutting back on marketing might offer short-term savings, but it can hurt your brand’s visibility and growth in the future as well as potentially impacting a key source of revenue – one that’s all the more important in tricky economic conditions.

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Here are three key reasons not to cut back spending on marketing:

1. Visibility is crucial during tough times

When consumer confidence drops, you need to stay consistent to build that trust that turns consumers into customers. The brands that remain visible and continue engaging with their audience are the ones that come out the other end stronger. If you pause your marketing now, you risk losing visibility and having to fight even harder to regain your position when the economy rebounds.

2. Marketing delivers long-term value

Even in challenging times, strategic marketing can deliver a strong return on investment. We can assist you in generating leads and sales by focusing on the right channels, optimising your budget spend, and positioning your brand for future success. What’s more, businesses that stay active during downturns often gain a competitive advantage when the economy improves, which, as we mentioned earlier, could happen in a few short months. This gives you a clear advantage, as you’ll have more customers and less competition when the economy recovers.

In past recessions, companies that chose to increase their marketing spend actually saw a 20% rise in sales , while those that cut back experienced a 7% decline. More recent studies, including research from McKinsey in 2002 and during the 2008 recession, show that businesses that maintained or even grew their marketing budgets were able to achieve long-term growth.

3. Recessions are usually short-lived

While it might not feel like it now, the fact is that economic downturns don’t last forever. In fact, 75% of recessions historically last less than a year. That means that cutting back on marketing may offer short-term relief, but it could put you at a disadvantage when the market starts to recover. Businesses that continue marketing are often the first to bounce back and gain market share.

So, even in tough times, continuing to invest in your marketing can help your business stay competitive and better position itself for success when the economy picks up.

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