Downturn Marketing Strategies: Ryanair Shows The Way
MARKETING is absolutely vital in a recession, so why is it that so many companies’ marketing budget gets slashed in testing economic times? It comes down to fear.
The fear that there are insufficient funds to sustain any significant marketing budget.
The fear that there is not enough money to sustain decent marketing spends.
Fear that marketing will make no difference because “customers and clients just don’t spend in a recession”.
Recession provides greater bang for marketing buck_While this fear is not quite irrational, it is most certainly illogical, because the evidence shows when a company cuts its marketing spend in a downturn it cuts its chances of surviving, and of thriving once conditions ease.
But why is this? Because many of your competing companies will recognize that recession presents an ideal chance to market bullishly, and take customers and clients from rivals firms who do not have the stomach for this. Dollar for dollar, marketing in a downturn provides a much greater return on your investment.
Take Ryanair. Today the Irish-owned airline is Europe’s premier low-cost carrier, but prior to 9/11 this was not the case.
It was only in the months after the New York terrorist attack that Ryanair managed to elevate itself to this position. It did so, because it bucked the prevailing marketing trend across the global airline industry at the time.
Yet while many airlines brought marketing spend to an abrupt halt following the 2001 attacks, Ryanair understood that by reducing marketing spend, a company risks being forgotten by its consumers and to cut it completely is to gamble with anonymity.
As a result, Ryanair decided to step up its marketing campaigns, taking aggressive action to persuade travellers to return to the skies. Ryanair’s impressive growth during the post 9/11 period demonstrates that bold marketing can usher a business through recession or similarly testing times.
Learning hard recession marketing lessons_Today, it seems the airline industry has learned its lesson, because results from a recent survey by Airline Business shows that most carriers believe marketing spend should not be slashed during difficult times.
Just under 50 per cent of those quizzed about 2009 spends, said they plan to spend ‘about the same’; 30 per cent said their marketing outlay would be ‘higher than the previous year’, while a further 10 per cent said marketing budgets would be ’significantly greater.’ Only 15 per cent said they would be cutting their marketing budget.
‘We’ll be spending up to a fifth more on marketing in 2009,” said Icelandair chief executive Birkir Holm Gudnason. And remember, Iceland suffered more economic devastation than most in the months following the Credit Crunch of autumn 2008.
“We’ve seen that as soon as we cease our promotions the number of bookings falls. But if we’re visible, the volume of tourists coming to Iceland rises.”
In a white paper on how to market in an economic downturn (’Keep calm and carry on Marketing’), the Chartered Institute of Marketing warns firms that they must not run the risk of handing competitors an important edge in the market. ‘Remain in the game’ is the message that runs through the report.
Planet Client is the only blog helping businesses win clients, keep clients and understand clients. It is part of journalist Sean Ashcroft’s unique client gift service, Sticky Clients
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