22 June 2009

By Catherine Proulx, Managing Director, Twist Marketing

At first blush, it may seem an oversimplification to liken municipal marketing in recession times to that old saw about the tortoise and the hare—spending decisions, especially with taxpayer dollars, are both complex and challenging, particularly during trying economic times. But upon further scrutiny of seemingly overwhelming criteria like voter confidence and long-term development strategies, the metaphor still holds true: the guy who keeps running is always going to be the guy who wins the race.

That doesn't make the decisions easy. The tyranny of the critical (keeping garbage from stinking up city streets and the water flowing to homes and businesses) often overrides the merely important. When juggling limited funds to address myriad goals, it's easy to pull money from marketing budgets simply by virtue of the fact that it won't mean crumbling infrastructure or pot-hole-ridden thoroughfares.

Or will it?

To see the tangible value in marketing spending, it helps to look at how that spending ultimately puts money in the coffers for the hard-service offerings, like maintenance and waste management. The smart CAO knows there's an immutable connection between what we invest in our community and what return we ultimately see, and this is even more true when the economy is flagging.

A recession may mean people travel less and spend more carefully—it doesn't mean they've stopped altogether, or that they won't start spending again down the road. A recession means investors are more cautious, perhaps slower to make decisions, but they're still out there, watching and listening. The only voices they'll hear, though, are the ones that haven't stopped talking.

The race continues, regardless of the economic climate, for communities to differentiate themselves and attract those coveted investment dollars that pay for the critical needs and services offered in a healthy community. Deleting the marketing budget is essentially dropping out of the race altogether, while other municipalities are still running forward. Who will likely win in the long run?

Running in fits and spurts—spending freely in healthier economic times and cutting the budget wholesale during downturns—means losing all the ground you've gained and relinquishing the road ahead to other, more consistent competitors. It impacts not only the race for outside investment, but also the confidence of residents who, on average, provide 80 per cent of all investment in a community.

It's a downward spiral of lost momentum: a recession leads to business closures, which prompt discouragement locally and an outside perception of a stagnant economy. Consumers lose confidence and stop spending while investors hang on to their cash, which in turn leads to more business closures and so on, creating a self-perpetuating cycle in which the community never crosses the finish line at all, never mind winning the race. Halting all marketing endeavours simply serves to reinforce a negative message of non-participation, closing doors that might otherwise open onto new opportunity, new industry and new potential for the community.

When you cut off a marketing budget, you're starving the future for the sake of today. The long run implication is that it ends the conversation that was getting people excited about investing in your community, and you're left with nothing to work with down the road.

A better tactic would be to sustain your conversation at modest levels, constantly working to find new, creative, and cost-effective avenues to get noticed among the crowd you are working to attract with your marketing message. A municipality that maintains a slow-but-steady, constant pace will create an upward spiral of optimism merely by staying in the race: using brand and marketing to capitalize on their community's strengths and shore up its weaknesses, promoting a perception (and a reality) of vigour and growth that will inspire new investment. This momentum can help carry a municipal economy forward despite a slowing economy.

Nor yet have we even touched on the opportunity available for those willing to push harder and lead the race: when the majority of competitors stop running, it exponentially increases the odds of success for those who remain on track.

There's a significant cost/benefit equation at work here: if others are spending less on marketing, you'll get more value for what you do spend. Not only can you keep the dialogue you're looking for open, you can engage more people within it by being one of the few voices still talking. Marketing is all about points of distinction and differentiation. What better way to differentiate your community than to ramp up your marketing efforts when those around you are limiting theirs?

Marketing during an economic downturn provides an open field you'd never see in healthier fiscal times, and those who take advantage of the diminished crowd can use marketing investment to pull ahead in ways not even exorbitant expenditures would allow in a more robust economy.

The Twist: Each municipality may have its own “finish line” and its own criteria for what constitutes “winning” the race for differentiation and investment, but those who choose to stop running altogether will forfeit their opportunity to enjoy any sort of meaningful win at all. Steady, consistent investment in marketing, internally and externally, will ensure that long-term goals are met without having to sacrifice short-term needs. More than that, it establishes a competitive advantage for those communities ready to pull ahead of the pack, establishing for themselves a lead position as the economy strengthens and money starts flowing once again.

For more marketing articles, please visit www.twistmarketing.com/resources