A BUSINESSTECH article headed ‘A Sure Sign a Company Is in Trouble – It Stops Spending Money on Marketing’ invites some navel gazing.

In his book ‘Crash and Burn’, Comair CEO Glenn Orsmond describes how this observation by Dave Novick about marketing spend being a barometer of a company’s health served him well during his next airline project.

Back in the day, Post was the top-selling cereal in the ready-to-eat breakfast cereal industry. But the 1920’s Great Depression hit hard, and Post slashed their marketing budget. Kellog’s invested heavily in marketing to promote Rice Krispies and saw profits increase by 30%, overtaking Post as the industry leader and never relinquishing that position.

The 2008 recession saw Del Monte Foods recover from a loss of $ 10.1 million to a profit of $ 58.6 million in Q1. The newly appointed Bill Pearce, their first Chief Marketing Officer, remarked:

“Don’t scale back spending. The old way of dealing with a recession was to slash and burn head count, marketing, and capital investment. But companies that do are likely to be out of business in five years. Now is not the time for across-the-board cuts”.

Closer to home, COVID caused a knee-jerk of cost-cutting in our own SHERPA. After a month or so of feeling jittery being out of the market we remembered our strapline – our promise to ourselves and our clients – of Stand Out. Be Found. How on earth would the Del Monte’s and Kellog’s of the world find us if we were invisible? We allocated a big chunk of our costs back into the fight and landed four big clients in a short space of time. We also gained new clients in the technology sectors such as AI and cybersecurity which were not badly affected by COVID, in fact their businesses grew.

With some intelligence and guts, you can enjoy great gains by investing more in marketing, repositioning timid competitors, and being the voice that reaches your audience.

Gary Hendrickse
CEO SHERPA
gary@sherpa.co.za
sherpa.co.za

Established in 2006, Sherpa Brand and Design offers brand strategy, marketing strategy, graphic design, and digital marketing. Our strapline of Stand Out. Be Found is a promise to ourselves, giving SHERPA purpose and belief.