What I learned about marketing from McDonald’s


Wednesday, April 8th, 2020

Liza RobbinsBy Liza Robbins.

It was the recession of 1991.

In America, McDonald’s saw its sales decline by 28%.

Meanwhile, Pizza Hut sales grew by 61% – and Taco Bell sales grew by 40%.

Can you guess why McDonald’s lost ground – while its two rivals flourished?

It wasn’t that Americans suddenly decided they preferred pizzas and Mexican food to Big Macs…

The answer is far simpler.

McDonald’s dropped its advertising and promotion budget because of the downturn…

…And Pizza Hut and Taco Bell, taking advantage, decided to significantly increase theirs.

I think there’s a lot we can learn from this – and from the hundreds of other examples and studies, spanning more than 100 years, that tell a similar story.

When times are tough, you should think twice before you stop marketing, or significantly trim your marketing budget.

Now, I know that’s counter-intuitive.

At times like this, you are probably eager to cut costs. And marketing is often one of the very first expenses to go.

Plus, we’re not selling pizzas….

…and none of those companies were trying to sell during a lockdown!

But there are good reasons why even today, during the Coronavirus crisis, you should continue marketing if at all possible. (To be clear, if you are quite literally fighting for your firm’s survival, your priorities and options may be very different, and this advice would not necessarily apply.)

First, this is the precise point at which many of your competitors will cut their marketing.

As Pizza Hut and Taco Bell discovered, this gives you an opportunity to capture your target market’s attention – and their business! When they’re not hearing from quite as many other firms, you can stand out.

Second, advertising costs may very well drop during this period, particularly on social media, because again there is less competition. This is already happening on Facebook, and is doubtless happening on other platforms as well.

Third, because during any kind of downturn you need new clients – and marketing is your best tool to get them. Why, at the very moment when you need your best weapons, would you drop them?

And last, but most importantly, because there are opportunities to be had.

I know that many people believe that in current circumstances, no one is going to switch their accountant.

But that’s not necessarily true.

Let me give you an example….

Just last week, one of our Cyprus firms, Kreston Ioannou & Theodoulou, won three new clients!

The way they did it was simple. They published frequent information about their government’s initiatives to help companies through Coronavirus.

Several companies asked them for further explanation, which they provided. And then, when these companies asked them for the bill, they said there wasn’t one! The service was free-of-charge.

Impressed by their helpfulness and initiatives, three of these companies asked them to start handling their accounts.

As the Cyprus example shows, during this very difficult period you need to change your marketing messages and focus.

Consider carefully what issues are likely to be most resonant for your target market while the Coronavirus crisis is ongoing – whether that is accessing financial help from the government, managing cashflow, recovering from crisis and so on – and focus on these.

Or you could style yourself as specialist Coronavirus advisors for a particular sector…

Be relentlessly helpful, because your potential clients are struggling with enormous levels of uncertainty right now, and are looking for leadership.

Either way, heed the popular saying – “When times are good you should advertise. When times are bad you must advertise.”

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