Aggressive Marketing for Recessionary Times

Meltdown an Opportunity for Marketing, Says UCLA Anderson’s Dominique Hanssens (Hat-tip: BNET Back to B-School Blog)

Even when the economy looks bad your marketing doesn’t have to suffer, says Dominique Hanssens, Bud Knapp Professor of Marketing and the Marketing Area Chair at UCLA’s Anderson School of Management. In fact, Hanssens, who recently served two years as the executive director of the Marketing Science Institute in Cambridge, Mass., and whose courses Andersen include Marketing Strategy & Planning and Research in Marketing Management, thinks a downturn is one of the best times for marketing to shine.

I sat down with him recently to discuss the pressures marketing executives are under during scary economic conditions. Here’s what he said.

Dann: What’s different about marketing during a recessionary period?

Hanssens: The difference is the challenge on budgets, because many companies feel that marketing should be budgeted as a percentage of revenue, and therefore, if revenue does not look good because of the recession, marketing budgets are often the first to be cut. There’s a lack of understanding of the strategic value of good marketing, so if you work in the marketing function during a recession you get challenged more on your spending levels than other parts of the organization.

Dann: What can a manager do to fight this off internally and get the resources he or she needs?

Hanssens: The answer is to demonstrate the return on the marketing spending so that you don’t become a cost center where your budget is a percent of revenue, but rather a profit center where the allocations are seen as providing positive returns—especially in light of some recent findings that the impact of marketing can be stronger during recessions than during the good years.

Hanssens: It’s a wonderful opportunity to think through the mission of the [nonprofit] again and if [donations are] really is down, not just to chalk it all up to the recession. But think through the goals of the organization and look at all parts of the [organization], some of which are hurt more than others and ask yourself, “why?” You can get an indication of the true value being created by that part of the organization. It’s a good moment to sit down and reflect. In good times, that doesn’t happen because so much money is coming in and companies don’t challenge themselves.

You don’t have to wait for the good economic times to be successful; you can be very proactive.