We've put stuff on our blog about this. Presented to groups of retailers about it. Sent out e-mails about it. But all too often, the common "wisdom" among business is still to cut advertising when times get tough.I've said it before, and I'll say it again. Cutting back on advertising and marketing promotion when business is bad is like -- exactly like -- saying "Business is bad so I'm going to cut back on trying to build business until it gets better all by itself."
Today's Ad Age online has this great article. It says this about what Bennigan's Steak & Ale, Mervyn's Department Store, Sharper Image and Baker's Square restaurants -- all of whom filed for bankruptcy recently -- have in common:
They all significantly dialed back on advertising in the months leading up to the End of The Line.
A few choice quotes from the piece:
"It is true that some companies try to cost-reduce their way out of problems, and all that does is delay the inevitable problem. You can't cost-manage yourself into the future." - Larry Light, former global CMO of McDonald's.
"It comes down to a very fundamental philosophical issue of advertising as an expense or an investment. If you view it as an expense, then you cut it . . . It's a big problem because people [make cuts] without truly recognizing some of the revenue benefits." - Kevin Keller, professor of marketing, Dartmouth
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1 comment:
Hmm...great point. Never really thought about their marketing efforts. I've been following their bankruptcy, but never thought what exactly led to their demise. My advice? for the companies that have filed and are still standing? Spend your gift cards before they really tank.
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