Marketing in a Recession – Powering Through a Downturn
The common feeling is that there’s a recession coming. Three months ago, a majority of experts predicted that there’d be a recession hitting in 2023. In the last month that prediction is getting fuzzy as the American job market flourishes and we get further into 2023. But that could all change. The outlook for an economic downturn in the medium future (if not immediate) is still likely experts say, 2024 for instance. While this potential recession looms, business owners should have a plan in place to weather the storm, and marketing in a recession is a good plan to have.
The First Assumption is Often a Wrong One
For many businesses, when theres a downturn in the economy, the first thought is to cut unnecessary expenses. Owners begin to look at what they think is extraneous and all too often, marketing and advertising budgets end up on the chopping block. We don’t know why, how do these business owners expect to get in front of new potential customers without advertising? Who knows.
Dialing back budgets does make sense for short-term concerns – but marketing is not a short-term play. Businesses looking to mitigate the harm of a recession on their bottom line should be planning (and spending) for the recovery, because it’s likely right around the corner.
Recessions Aren’t Forver
Recessions don’t last forever. 75% of them end within a year, and about a third only last 6 months. Cutting spending will only be a short-term effort, and the money saved is likely to be fairly nominal. What it does do? Puts businesses in a tougher spot to recover when everything is in an upswing. After all, every break in continuity of a campaign breaks it’s efficiency, it’s ability to scale, and it’s ability to deliver results. Add to that that most businesses are already under-spending in their campaigns, further cutting will see business crater rather than flatten.
So What’s the Solution?
At this point you’ve figured out the solution isn’t cutting budgets across the board. But there may be some cuts you can make. The real solution is to optimize and invest in channels that are already performing well for you. Through optimizing your campaigns you can get better results on the budgets you’ve already allocated.
Keeping your marketing dollars in play keeps your brand alive in the marketplace. When other businesses are backing out, the supply and demand dynamics change, favoring ad buyers more than ever, lowering costs to keep your business’s marketing running. So while your competitors are cutting budgets and disappearing, you’re able to take over their spots with efficient campaigns that cost you less in the long run!
You Can Still Grow, Even in a Downturn – You Just Need to be Creative
As consumers become more aware of their spending habits, things will change. Perhaps large ticket spends are on pause for a few months, but smaller items see a rise as it’s easier to rationalize the small indulgence. That’s just one possible example, but you get the point. Be aware of these potential spending changes and make plans for them. Using recession friendly marketing can create opportunities and reaffirm value of business in the mind of the consumer, creating brand loyalty that lasts.
Being creative is the name of the game. Here are a few ways to set yourself apart from the rest, and set up for success.
Reevaluate and Refine Your Target Audience
During a recession, consumer behavior tends to shift as priorities change. Reassess and refine your target audience to align with the current economic landscape. Analyze market trends, customer data, and consumer sentiment to identify the segments most likely to be resilient in the face of a downturn. Tailoring your messaging and positioning to address their needs and concerns can help you maintain relevance and connect more effectively with your audience.
Focus on Value and Differentiation
In a recession, customers become more price-conscious and look for products and services that offer the best bang for their buck. Emphasize the unique value proposition of your goods/service and highlight how they can solve specific pain points or provide cost savings. Consider offering discounts, package deals, or other incentives to encourage purchases. Communicate your competitive advantages and distinctive features clearly to differentiate your brand from the competition.
Maximize Digital and Social Media Channels
Invest in targeted online advertising campaigns to reach your refined target audience effectively. Leverage SEO techniques to improve your website's visibility and organic search rankings. Engage with customers on social media platforms, providing valuable content and actively participating in discussions. Influencer partnerships and online collaborations can also amplify your brand's reach and engagement. More on that later!
Enhance Customer Relationships and Loyalty
Maintaining customer loyalty is vital during a recession, as acquiring new customers can be costlier and more challenging. Strengthen your relationships with existing customers by providing exceptional customer service and personalized experiences. Implement loyalty programs, exclusive discounts, or rewards to incentivize repeat business. Leverage email marketing to nurture your customer base and keep them informed about special promotions or updates. Actively listen to customer feedback and address their concerns promptly to foster trust and long-term loyalty.
Strategic Partnerships and Collaborations
Collaborating with other businesses can be a mutually beneficial strategy during a recession. Seek out strategic partnerships that align with your target audience and brand values. Pooling resources, sharing marketing efforts, or bundling complementary products/services can lead to cost savings and increased market exposure for both parties involved. Look for non-competitive businesses that can offer added value to your customers, expanding your reach and tapping into new customer segments.
Optimize Data Analytics and Measure ROI
In challenging economic times, it becomes even more crucial to allocate marketing resources effectively. Implement robust data analytics tools to track and measure the performance of your marketing campaigns. Analyze key metrics such as conversion rates, customer acquisition costs, and customer lifetime value to identify the most impactful strategies. This data-driven approach will allow you to make informed decisions, optimize your marketing spend, and focus on activities that generate the highest ROI.
When recessions hit, and consumers become more conscious with where their dollars go, business owners need to be able to make a compelling argument for their services – that’s marketing is all about! Make smarter plays with your campaigns and you’ll not only survive the downturn, you could thrive.