Marketing During A Recession: Should You Do It And How?
Marketing during a recession: Should you do it and how?
With volatile interest rates, inflation, and news of a looming recession, many businesses are tightening their spending to weather the storm. The question is, should you still invest in marketing?
The short answer is, YES.
During an economic crisis, prudent businesses recognise that it is a pivotal time to strategically fight for a shrinking market share – even if it is temporary. Hence, indiscriminately slashing your marketing expenditure can be counterintuitive to business survival and long-term business growth.
In 2010, The Harvard Business Review published their findings from a year-long analysis of 4,700 businesses across three global economic crises from 1980, 1990 and 2000. The study broke down the data into three phases: the three years before a recession, the three years after, and the recession years themselves.
While 80% of businesses that survived did not regain their pre-recession growth 3 years after the recession, 9% flourished during and after. They outperformed their competitors by at least 10%.
The question is, how on earth did they do it?
Balance between offensive and defensive strategies were key
The study indicated that businesses that severely cut costs did not fare better than other businesses. Companies that aggressively charged forward with investments could not always guarantee the momentum for their post-recession success either.
The businesses that performed well chose a more varied approach and reduced their spending selectively. While the article cited that many focussed on operational efficiency followed by spending on marketing, R&D and new assets when things picked up, we cannot ignore the fact that effective tactics are dependent on various circumstances like business nature and life stage, market appetite and of course, financial circumstances.
One fundamental thing to learn from historic recessions is that while consumers tend to tighten their purse strings during economic turmoil, long-term consumer spending does not shrink.
What does this mean?
Successful businesses do what it takes to weather the storm but at the same time, they put their strong foot forward to avoid missed opportunities.
In the same way that no two businesses are alike, every recession has unique circumstances that create opportunities to perform and thrive.
With more data available today surrounding the efficacy of marketing than ever before, many businesses can be smarter with their marketing strategies.
No two businesses are alike, every recession has unique circumstances that create opportunities to perform and thrive.
Key things to keep in mind when marketing during a recession.
Recession marketing can be challenging as there are several circumstances that are unique during these times. Between tightened budgets and consumer sensitivities, marketing during a recession can be nuanced. Here are some guidelines to help your marketing team navigate through the recession and come out stronger on the other side:
Be mindful of analytical data but don’t let it diminish creativity
Whether it is social media or Google analytics from your website, there is a wealth of information to provide insight on how to target your ideal customers. In the present economy, an up-to-date website that is search engine optimised (SEO) will provide a business with better virtual footfall and brand visibility in the long run.
That said, data is there as an aid, not a rule. It should not hamper creativity that helps build and maintain a long-term presence in your target audience recall during recession recovery.
Stay focussed and remember who your customers are
There is no doubt that customer satisfaction is paramount at times like these. Regardless of consumer or B2B spending, financial resources are scarce during the depths of recession and expenditures are more thoroughly considered. Identifying your ideal clients and their priorities during this time not only keeps the customer happy, but it also helps you stay focussed on your marketing priorities.
Learn more about how you can delve deeper into Ideal Client Personas here.
Focus on delivering value
Practicality rules during an economic crisis. Consumers and businesses are looking to optimise the value of their spending. This is the time that your business should look at highlighting the key benefits and how the product/service provides solutions to the struggles faced by the customer.
Be mindful of your messaging strategy and stay authentic
It’s not what you have to say, it is how you say it.
A customer’s perception of a business lies in how they are communicated to. Are you speaking to your customers in the way that you want to be heard? Given the circumstances of an economic downturn, it is imperative to communicate with compassion while getting your point across. There may be instances where you might have to have a difficult conversation with your customers (e.g. price increase, stopping of product/service line, etc.) and it is imperative that these communications are handled with grace.
Read our article about communicating price increases here.
Be a thought leader and use your role to educate
Related to our earlier point about demonstrating value, content marketing allows businesses to demonstrate their expertise in their sector. Don’t be hesitant to share insights that can help alleviate your clients’ challenges as this helps build long-term trust, credibility and relationships with your brand.
Don’t be afraid to outsource your marketing
With the myriad of marketing channels available today and the messaging nuances that businesses need to be mindful of, marketing can be immensely time consuming and challenging today.
Speaking with an agency can help you identify the low hanging fruit towards optimising your marketing expenditure during a challenging economic climate. If you need to talk to someone about some ideas on how to optimise your marketing, the BoldType team is happy to help!
