Watching the news or reading the papers is not very enjoyable in times of major economic downturns. The three common stories we get are companies go bust, companies apply for bail out, and companies are cutting costs wherever possible.

Let’s look at cost cutting. Activities that are not directly related to sales are usually affected the most. Marketing budgets have been reduced significantly. Only few exceptional companies follow an anti-cyclic strategy such as Audi or Beiersdorf, who boosted this year’s marketing budget in order to transform the crisis into an opportunity.

However, for many companies marketing investments have become ball and chain, as can be seen when looking at the discontinuation of numerous sponsoring partnerships like car brand Volkswagen and “Deutsche Oper” (German opera) as well as the three banks ING, RBS and Credit Suisse and their Formula One partner teams.

Prof. Anton Meyer, Chief of the Marketing Institute at Munich University says: “It is a mistake to cut down the marketing budgets in times of crisis. The crisis is a good opportunity to strengthen market shares and to build customer confidence.” and therewith emphasises an assumption that many marketing experts and recent studies agree with: Now is the time for companies to act. Cost efficient sales measures combined with a well-focused company strategy are more important than ever before. Considering the context, co-operating can be an attractive and effective tool in terms of a company’s strategy – unfortunately many companies have not yet realized the potential advantages of joint measures. Furthermore, there are three major misapprehensions that might explain this situation:

• Misapprehension No. 1: Marketing co-operations are not sales relevant
  It clearly depends on how a co-operation is planned and implemented, but generally speaking marketing co-operations can be effectively utilised and by that generate increased sales. This can be achieved, for example, by benefiting from the partners’ direct access to specific target groups.
  A good example is a co-operation of comdirect bank and retail chain Tchibo in Germany, in which comdirect markets attractive banking products exclusively via Tchibo’s online and offline shops – with great success.
• Misapprehension No. 2: New marketing co-operations are an additional cost driver
  It hardly makes sense to look at marketing solely from the cost perspective. It is rather the ratio between costs and generated benefits of the selected marketing measures that matters - especially in times of recession. Here, new opportunities like marketing co-operations can reduce costs, since co-operating partners can share their respective costs, e.g. by splitting advertising budgets of joint measures.
  In Germany, the coffee brand Senseo and online dating platform Neu.de have done so for years. They successfully advertised an innovative coffee machine system in combination with the general concept of ‘trying new things’, i.e. finding new love.
• Misapprehension No. 3: The establishment of co-operations takes (too) much time
  Co-operations can be established within short time periods, when adhering to a set of relevant principles: Hands-on co-operation offers, parallel talks with several potential partners, a concept where both partners and their customers win at the centre of interest (“Win-Win-Win”), clear definition and focus on a clear set of specific measures as well as close alignments during the implementation. By adhering to these points, a co-operation can be established and implemented within a few months rather than quarters.
  In reaction on the market slowdown and consequential actions of the German government thereon, US car brand Ford, for example, recently established a co-operation with MySpace Germany for promoting Ford’s model “Ka”. The co-operation aims to raise awareness within the young, urban target group by integrating Ford in the second season of the web soap “They call us Candy Girls” starting in April.

So, even during a recession there is no point for decision makers to halt new business activities and to refuse new projects. Right now, it can be a mistake to think in (over)simplified categories, particularly if it abstracts away from solid marketing opportunities. The realignment of the present marketing strategy and consideration of new marketing prospects are essential steps before executing cost cuttings.

In any case, a categoric refusal of new business prospects will neither help in positive economic situations nor in a crisis. Accordingly, we are not simply arguing pro co-operations, but pleading for a fact-based approach of assessing all opportunities: In a crisis, “doing the right things” becomes even more important.