Million Dollar Loss Taught Business Owner About Handling Downturns
Inc. Magazine founder Joy Gendusa describes how marketing cuts during a 2008 downturn cost her company over $1.5 million. A different approach in 2020, however, led to significant growth.
Joy Gendusa, founder of Inc. Magazine, outlines the lessons learned from navigating two significant economic downturns and their impact on her business strategy. Her experience highlights the critical role of marketing during uncertain economic periods.
Gendusa recounts that following the 2008 housing market collapse, her company, heavily reliant on real estate-related businesses, faced severe repercussions. Against her initial instincts, she followed financial advisors' recommendations to cut marketing expenses. This decision resulted in the company's worst financial year, with losses escalating to over $1.5 million in the subsequent year.
This costly mistake prompted a strategic shift. When a new economic crisis emerged in 2020, Gendusa deliberately chose the opposite course. She increased marketing investments and conducted a thorough analysis of customer data and past campaigns. This led to a 10 percent revenue increase, a gain of $3.7 million for the year.
Gendusa emphasizes that marketing should be treated as a non-negotiable expense, akin to rent or payroll, especially during economic challenges. Furthermore, she stresses the importance of strategic analysis and diversifying the customer base to ensure continued growth even amidst difficulties. Through these adjusted strategies, her company, Postcardmania, achieved record revenue levels.