The RP Photonics Marketing News > 2025-04-10

Marketing in Difficult Times

Business in photonics, just as in other areas of technology, is occasionally facing more difficulties than at other times. Currently, we struggle with the manifold repercussions of a trade war started by the U.S. administration, particularly because it creates serious confusion due to contradicting statements, unpredictable changes and absurd arguments, making it difficult for any business to plan even for the near future. Before that, we went through other difficult times, notably the coronavirus crisis and various other downturns for international trade. Anyway, we somehow need to get through all this based on wise decisions. Some thoughts on this may be helpful.

Stabilizing Profitability

When revenues go down, it seems like a natural reaction to reduce expenses as well in order to avoid generating financial losses. In other words, you will try to stabilize profitabilty of the enterprise.

Options for Cutting Cost

Some of the expenses are quite hard to avoid or reduce – for example, if you just spent a lot of money on an acquisition and times get worse, you cannot simply reverse that. Also, you don't want to fire employees – not only due to the desire to be nice to them, but also keeping in mind that hiring and integrating new employees later on usually costs a lot.

Going through various options which turn out to be difficult, one may look at external costs which can be canceled relatively easily in the absence of a long-term obligation. Marketing expenditures are an example for that: For example, you may save a substantial amount of money by canceling the participation in some of the upcoming exhibitions, or typically a much smaller amount on digital marketing.

Cutting Cost and Cutting Revenues as well?

But wait a moment, we should not forget that the final goal is not reducing expenses, but improving the difference between revenues and expenditures. That is an essential point indeed: If you reduce your expenses by some amount in a year, but that substantially reduces your revenues, your deficit may well be larger than before! So you will not have worked toward solving the problem, but only exacerbated it. Effectively, you have taken a step towards the cliff.

Of course, a crucial question is whether certain expenditure is worth it. We know that in digital marketing, for example, a lot of money is wasted because marketing platforms cannot deliver value for various reasons like insufficient traffic, poor audience match or inconvenient presentation of information. Therefore, every such expenditure deserves critical scrutiny – notably, not only in difficult times, but always at the time when you consider starting it! Those checking their expenditures only when getting into difficult times are not properly doing their job. Others will know at any time why they invest into certain things, and the reasons for that usually don't change in a crisis. In other words: Some expenses are worthwhile in good and bad times, and should therefore be maintained, while others are not, and should thus be canceled at any time or better not started in the first place. Well, sometimes you need some tests to discover what works and what doesn't. Concerning digital marketing, the analysis of referral traffic is usually something you can do only after having started, but you should not wait for a crisis to take a decision.

Another aspect is that it makes little sense to pay salaries for marketing people who are then limited to doing things which cost nothing. If you want them to achieve anything, you need to give them some resources. If you don't, they may actually leave you – particularly the best ones.

Considering Soft Factors

One should also consider several factors, not only direct revenue driving. Soft does not mean unimportant; in particular, the public appearance of an enterprise is a vital asset which may be hurt inadvertently. For example, if you cancel the usual presence at a certain exhibition, people may wonder whether your business is still stable. Well, maybe they understand that sometimes shifting the focus a little does not necessarily indicate a serious problem. But if they see you canceling vital but relatively inexpensive things – say, our Advertising Package –, they may start wondering how close to the cliff your business is. And that may have an impact on future opportunities!

Using Financial Reserves

It is important to keep in mind that a temporary loss of profitability should normally not be an existential issue. For that, a business needs to have some financial reserves, which allow it to keep its operations stable if things are difficult for a while. For example, you better continue spending money for the salary of a good employee even in a year where that person is underutilized and you run a deficit; it would be less attractive to hire a new person a year later, who may not be as good. And even more, you better continue spending for vital marketing efforts (such as our Advertising Package), knowing that canceling this will usually cause significant damage: direct loss of revenue due to less effective lead generation, plus lost general visibility and perhaps even a problematic impression on observers who wonder whether you are winding down your business.

Of course, that is an option only if you have reserves. If you haven't, for example due to not so wise decisions in better times, you may be in trouble. Businesses having no other choice than cutting expenditures, no matter what the effects are, may not survive much longer.

Borrowing money could in principle also be an option, but who wants to lend money to a company being in trouble due to insufficient reserves? You will at least not get good conditions for that.

Conclusions

We can draw various conclusions:

• Particularly in difficult times, resources need to be focused on what works. But that should actually be done at any time! Those starting that at the beginning of the crisis may be too late.
• Therefore, marketing people (just as any others) should at any time have a clear understanding of both the costs and benefits of everything they do.
• Brutal budget cuts ordered by the management, considering only costs but not the difference between revenues and expenses, can be a killer for a business, kicking it over the cliff. Obviously, good management analyzes such differences all the time, and will therefore in times of crisis revise only those decisions which are really affected by changed external conditions.

• For example, you rightly cancel preparatory works for building up a new production plant when you found that the conditions got too uncertain, e.g. if you can no longer trust that the government of that country implements rational economic policies. Or you cancel exhibition marketing in a country where business became unattractive due to high tariffs. But you won't cancel things which are as beneficial as ever, or even more deadly needed in a difficult period.
• Keeping profitable may not be possible during some difficult periods; the solution for that are simply sufficiently large financial reserves built up in better times.
• If you find yourself in a company where the management does not appear to understand those things, you should consider better places for your professional future. Again, the best time for that may not be in the middle of a crisis, but it happens that you can detect such deficits only then.

Obviously, as the creator of the RP Photonics Buyer's Guide , I do have a vested interest in this topical area, but anybody is welcome to come to his or her own judgment after scrutinizing the presented thoughts.

This article is a posting of the RP Photonics Marketing News, authored by Dr. Rüdiger Paschotta. You may link to this page, because its location is permanent.

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