Why You Need a Marketing Budget During a Recession

July 30, 2022


When times are difficult and sales are slow, companies look to reduce their non-essential costs. Usually, the first budget to be cut is the marketing budget, as companies focus on funding expenses that are considered more important, like salaries, rent, and other operating expenses.

While companies must try to reduce their expenses, other costs can be cut that won't harm the business's long-term success. An example is to look for ways to save money on car insurance if the business has many company vehicles.

Adjusting the marketing budget may be necessary, but cutting it completely can have far-reaching consequences.

What Happens When the Marketing Budget is Cut

Adjusting the marketing budget may be necessary, but cutting it completely can have far-reaching consequences. Some of these include:

Lack of Communication with Customers

Advertising is typically the most significant way that a business communicates with consumers. Whether in the form of advertising on TV or a billboard, as a sponsorship like sponsoring the local kids' soccer club, or simply having a visible social media presence, communication makes companies more trustworthy.

Out of Touch with Customer Needs

A large part of marketing is researching and understanding customer needs. Customer needs are constantly evolving, and this is more so during a recession. If a company does not keep up to date with these changing needs, it will not be able to offer consumers what they are looking for.

During a recession, companies should examine customer needs more closely so that they can adjust their strategies and product offerings to meet their customers' changing demands.

Communicates Business Instability

People want to do business with companies that have a strong presence. When your marketing efforts are stopped and the company loses visibility, even loyal customers see this as corporate instability and will look for other brands to shop from.

Stability is essential, as customers will doubt that an unstable company can provide good quality and offer top-quality customer service.

Miss Out on New Customers

Even if customers don't have the money to purchase from your business during a recession, they may still want what you offer when they have money. If you're not visible in the marketplace, these new customers will have no way of finding you.

Businesses that spend time and money on marketing during a recession are likely to stay above their competitors whose marketing budgets fade into the background. In fact, advertising during a recession is an excellent strategy since most competitors will cut their advertising, so there’s less noise to compete with.

Managing Your Marketing During a Recession

Since there will be budget adjustments and changes in consumer behavior, it’s essential to pay attention to your marketing efforts and tweak them where necessary. Consider the following:


Price is a key part of the marketing mix, and during a recession, when sales are slow, businesses tend to panic and slash prices, hoping that this will attract customers. Price slashing and offering deep discounts is not a solution. Offering massive discounts may tell customers that the business is struggling and desperate.

It forces competitors also to reduce their prices to compete. This can lead to a price war that can eventually cripple the entire industry. Small, strategic discounts at the correct time can work. But a business should resist offering massive discounts as a knee-jerk reaction to a lack of sales.


Ad hoc marketing can do more harm than good. Often, communities lack direction and instability. Customers consistently seeing your branding builds credibility and trust in their minds. Focus on having a clear brand strategy and message and be consistent in your marketing efforts.

Low-Cost Marketing

The marketing budget will inevitably have to be reduced during a recession, but there are low-cost options to remain visible consistently. The easiest way is to ensure your online and social media presence is on point.

Update your website and post interesting, engaging, and relevant content on your social media platforms. Going live on Facebook and Instagram is a great way to engage with customers and let them know the business is still going strong.





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