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Are we in the middle of a recession?  Many analysts think so.

While the economy is heading south, you’re still under enormous pressure to report solid earnings.  Meanwhile, your sales are declining as customers begin to decrease their purchase quantities.  Or they may demand lower prices, so you may have to cut your margins. 

This further hurts your profitability. 

In a soft economy, shortsighted executives will panic and bolster their next quarterly earnings report by cutting the ad budget.  After all, advertising is an expense.  Eliminate it and the money drops right to your bottom line.  It’s a quick fix. 

But it is a costly one!

Here are five good reasons NOT to trim your advertising and promotion budget in an economic downturn.

1.  You’ll find bargains.

Other companies are cutting back their advertising  budgets.  This leaves newspapers, magazines, and broadcast media with space/time to fill.  They have excess inventory, and your sales rep will likely be willing to cut a deal to entice you to use their medium.

Bargains are available, but you have to ask for them.  Never, never, never, buy media off the rate card.  Those rates are for one-time buyers, or schmucks who fail to negotiate.

2.  You need to keep your customers and prospects informed of changes in your business.

The business environment changes quickly.  Advertising, besides its power of persuasion, is also an information tool.  It’s often how we learn of innovations in the marketplace.  It’s how we learn of new products and services.  It provides information about those products and services to our customers and potential customers.

There’s an old adage that says, “Without advertising, you wouldn’t know.”  Given the information, your customers will become more likely to buy.  Even in a poor economy.

3.  Your competitors are probably trimming their budgets, so you will stand out and gain market share at their expense.

If your competition suddenly becomes invisible, whom do you think the marketplace will turn to when it needs to buy?  That’s right, the one they keep hearing about, because you haven’t trimmed your advertising budget. 

By advertising in a slow economy, you may minimize your decline in sales, or even increase sales as you pick up your competitors’ customers.

4.  If your competitors don’t trim their advertising budget, you could lose market share to them.

Makes sense.  You trim your ad budget, and suddenly you become invisible in the marketplace.  Meanwhile, your competitor has maintained his promotion and advertising spending. 

Your customers learn more about your competitors’ products.  They decide now might be a good time to try them.  And you lose a customer, something you can ill afford, especially as all of your other customers are cutting back on their purchases.

5.  Your customers and prospects will remember you when the economy picks up again.

You know the economy will rebound.  It always does.  There are too many factors favoring growth:  increased productivity, innovation, international opportunities, etc.  The list is endless. 

You need to be positioned as a survivor.  If you have maintained your promotion spending, when the rebound comes, as it will, your company will have the image of a leader, the one to depend on in your industry.

So while the country suffers a brief economic “correction,” it would be shortsighted to panic and trim or eliminate your promotion spending.