Don’t cut marketing budget in a crisis

By Stratrix Staff Writer

Boston, MA | Updated 30 Mar, 2021

Don't cut marketing budget in a crisis

Many startup founders tend to cut the marketing budget in a crisis. A crisis like the recent Covid-19 pandemic creates new and unexpected challenges for businesses.  To conserve cash and survive the downturn, it is understandable why there is a temptation to cut the marketing budget in a crisis.

It is a stage where the startup leadership teams must review budgets and strategies to ascertain any areas where they can save money.

It is common for marketing activity to be one of the first cuts a startup makes when trying to reduce expenses. The view is that marketing activity is expendable. Cutting or pausing an advertising campaign is much easier than making redundancies or slashing the inventory. However, if nobody hears about you, how will the business make revenue? Dropping the marketing function could well provide short-term gains, but won’t solve the long-term situation.

“When times are good, you should advertise. When times are bad, you must advertise.”


Businesses have a choice at a time of crisis. They can either look to cut costs or try to increase sales to account for any shortfall. In an ideal world, entrepreneurs would like to achieve both, but it is termed a “crisis” for a reason.

In this article, we will look at why businesses should not cut marketing in a crisis.

Why you should not cut the Marketing Budget in a Crisis:

A recent survey on UK businesses reports that just 7% of owners are increasing marketing spend during Covid-19, with the vast majority opting to cut spending. Another study by Marketing Week also shows how marketers are pausing or stopping spend, rather than seizing the opportunity to generate sales.

Don't cut marketing budget in a crisis - Impact of COVID on Marketing

Businesses are intuitively restricting the expenses that are under their control and easy to manage. However, the Institute of Practitioners in Advertising (IPA) found that companies that reduce marketing spend by 50% take three years to catch up with competitors who choose not to do so.

Stability and loyalty

Although behind the scenes, the future of your organization may be under threat, continuing with regular marketing activity can project a stance of stability to your loyal customers. At a time where cash flow is slow, a business can ill-afford to lose more customers as they move to the competition. The focus needs to be on ensuring a solid strategy post-crisis. Some of the largest organizations have taken an economic crisis as a way to accelerate their growth. Disney, Microsoft, and Adobe are some examples, but a more recent case is Airbnb.

Airbnb was a brainchild of the 2007-08 financial crisis when the founders, Brian Chesky and Joe Gebbia, saw an opportunity in the short-term living space. The skyrocketing prices in the hotel and leisure industry made the service an appealing consumer option. Airbnb is worth around $31 billion (pre-Covid-19).

Crisis decreases competition

The statistics above tell us that over 50% of companies will likely be decreasing marketing spend during Covid-19. Instead of doing the same, it is a perfect time for a business to seize upon the additional consumer market. Fewer competitors may allow companies to spend less on advertising but remain profitable, and their rivals hold back. If a brand operates within a niche industry, there could be significant value in introducing a new product when the competition cannot supply it.

Amazon took advantage of the 2008/09 recession with the launch of the Kindle. The low-cost product option was helpful for customers with struggles during economic decline. The Kindle was the best selling product across the entire range at the time.

More people are online

While it might not be true of all crises, one such as Covid-19 has driven people online, even if they are not in public view. With Covid-19, internet usage figures are up by as much as 70%. A crisis can prove the ideal time to get in front of new and existing customers.

Adjust but don’t cut the Marketing Budget in a Crisis:

The question for business owners and entrepreneurs is if slicing the marketing budget doesn’t work, how do they adapt it?

A great example comes from Eric Siu, the entrepreneur and investor. He gave away a course that was usually worth circa $1,500 for free, which around 250 people took up.

Don't cut marketing budget in a crisis

The numbers seem small, but from the publicity, Siu was able to do a webinar to a new audience of 50,000 people. A single act to adapt marketing activity was able to provide a profitable outcome.

For Siu, the key to success was changing the call to action in his marketing campaign. During a crisis, people do not respond to the same things in the same way. The call to action should represent how a business can help the customer in their time of need. We can take lessons from the traditional 4P’s of marketing; product, place, promotion, and price.


In a crisis, the product needs to provide a solution that resonates with the customer. A great example comes from Pomchies. The fashion brand is known for headbands and scrunchies but went into the face mask market during Covid-19. With this, they can retain their loyal customer base.

The specialist resource and scheduling tool provider set up a special page on their website to help companies manage remote work. The focus is on connecting people no matter where they are, the exact product businesses are looking for during a crisis.


Businesses with an omnichannel presence are the success stories of Covid-19. These companies can be in the right place when consumers want digital channels. The restaurant chain, Panera Bread, use their supply chain to their advantage. During the 2020 crisis, the company was able to provide customers with essentials like bread, eggs, and milk, alongside the regular menu.

In being available when customers need you, a business creates a unique selling point at crisis time.

The Zoom video conferencing platform has risen in popularity during 2020. The company went from 10 million to over 300 million users in just three months. A major part of the success has come from providing businesses with the training and skills to create digital channels for their customers. SME’s can reach their customers and maintain relationships.


Price is more about value during a crisis. Consumers are not necessarily expecting a brand to lower prices, but they expect some added value instead. For example, brands can offer an extension to payment terms or a better warranty as a compromise in the uncertain times ahead.


In a crisis, marketing needs to focus on educating customers rather than advertising products to them. Taking advantage of a negative situation with self-promotion is not what consumers want to see. McDonalds did so with a unique social distancing logo, which was not well received.

The key takeaway here is that marketing needs to adapt during a crisis. With a strong strategy, marketing activity can still bring in revenue, even in the toughest of conditions. Cutting marketing out of your budget could quickly alienate you from your customer base and leave you falling behind the competition.

Marketing is a vital function in a business. In the time of a crisis, there is a golden moment for companies to gain attention and show customers your worth and value. Rather than slashing budgets, a new approach to marketing can take a business to the next level.

so, our advice is simple: Don’t cut the marketing budget in a crisis.