Ryanair Is Shining Example Of Downturn Marketing

by Sean Ashcroft

Marketing becomes ever more crucial in an economic downturn, so why do so many businesses cut their marketing spend to the bone as soon as the economy takes a serious dip? The answer can be found in a single word: fear.

The fear that there are insufficient funds to sustain any significant marketing budget.

The fear that redundancies will be the result if the marketing budget is maintained at pre-recession levels.

And the fear marketing will have no impact because "people simply do not spend in a downturn".

Such fear can be understood, but that does not make it any more logical; all the evidence points to the fact that when a company reduces its marketing outlay in a recession its chances of surviving plummet.

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.

Europe's largest budget airline Ryanair provides the template for how approach marketing when the proverbial hits the fan.

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.

Virtually every other airline believed people would not want to fly in the wake o 9/11, and as a result, they froze marketing budgets. Ryanair, though, felt that by following suit it ran the risk of losing market visibility.

Unlike its rivals, Ryanair embarked on a vigorous marketing campaign, encouraging passengers back to air travel. The company's significant growth during this time proves that a bold marketing strategy can see you through tough times.

The airline industry has taken this lesson on board. Research by airline industry publication Airline Business reveals that airlines now recognize that marketing should not be slashed when things get difficult.

Around 45 per cent said they plan to spend "about the same", 30 per cent said their marketing budget for 2009 would be "higher than last year", while a further 10 per cent said their marketing budget for 2009 would be "significantly higher." Only 15 per cent plan to "spend less".

'We are planning to spend up to 20 per cent more on marketing this year," says Birkir Holm Gudnason, who is chief executive of Icelandair. Iceland's economy, remember, suffered more than most in the wake of the Credit Crunch.

"We have seen since October that as soon as we stop promotions the inflow of bookings slows down. If we are visible, the number of visitors to Iceland increases."

In its white paper on recession marketing, called 'Keep calm and carry on Marketing', the UK's Chartered Institute of Marketing warns businesses that if they are not in the game, they run the very real risk of giving their competitors an important edge.

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.