The verdict is still out on whether 2023 will mark the beginning of an economic recession (and when it will happen). The truth is that every business is likely to face a recession at some point or another in its lifespan. Knowing how to market your company effectively in such conditions is key to thriving in otherwise difficult times. Some of the strongest companies in the world were built during recessions, and while you may need to revisit your marketing strategy to adapt to a changing business landscape, it doesn’t mean you need to lose marketing momentum.
Invest in retention
Your existing customers will keep your profits coming in, even in a recession. It costs five times more to acquire a new customer than it does to maintain an existing one. It’s important for your brand to foster a sense of community by maintaining a connection with your existing customer base. When economic times are tough, customers are most likely to keep spending on the brands they are loyal to, instead of trying out new products. Consider retention-focused email marketing campaigns or exclusive offers to show your customers gratitude.
Define key metrics
Get clear on the metrics that will best communicate the efficacy of your marketing campaigns, and monitor them closely to assess whether your marketing costs are justified. By understanding which metrics are most relevant to your business –whether you are prioritizing conversions, ad impressions or MQLs (marketing qualified leads), you’ll be able to make informed decisions regarding your marketing budget.
So how do you advertise in a recession? For many companies, ad spend is the first to go during economic downturns. Whether or not this makes sense for your company is dependent on many factors such as your industry, the size of your organization and your overall marketing budget. In some cases, there can be advantages to advertising when others are cutting their spend offering you a competitive advantage. If your ad budget is constrained, consider focusing your efforts on inbound marketing tactics such as social media marketing, organic SEO and blogs.
Know your competition
It’s always important to keep informed on your competitors’ marketing efforts. It’s even more important for your organization to stay competitive during a recession. You need to understand your competitors’ strategies so that you can position your company in the best possible way. If your competitors are continuing to invest in marketing while you are not, it leaves the door open for them to acquire new customers that could have been yours. Doing your due diligence with market research is especially beneficial during a recession, otherwise you risk losing out on valuable market share.
Be crystal clear on your value
In a recession, discretionary spending is at its lowest. This is a time where you need your marketing campaigns to be extremely clear with your customers on the value your products or services provide. If your offer is vague or you’re unable to effectively communicate the virtues of your products, potential customers won’t be able to justify buying from you
Your campaigns should be clear and compelling to ensure success. Intimately understanding your target demographic and knowing what their pain points and values are will help you align your marketing efforts to highlight how your product or service is right for them. Remember, effective marketing is an exercise in proving how your business can solve a problem for your customers.
Stay visible
One of the worst things a company can do during an economic downturn is stop all marketing and disappear. While you may need to make difficult decisions around your budget, maintaining continued visibility is key to sustaining your revenue. A strategic approach may be required to market your company so that you can continue to maintain sales (or even grow them).
Don’t cut corners
There are many stories of local restaurants that start to buy lower quality ingredients when times are tough to save on costs. What happens next, is that business gets worse because the quality of the food has decreased and patrons stop visiting or recommending the restaurant. Too many companies have failed because they cut down on quality to save on expenses – unfortunately, this is a costly and potentially dooming strategy.
It may be tempting to cut corners to save on expenses, but a poor quality brand image will cost you even more in the long run. Be sure that you are always presenting your brand in a professional, credible way. Poor quality marketing messaging or content that doesn’t meet best practices can have negative impacts on your business even in the long term. Undoing a negative brand reputation is a challenging thing. You have one opportunity to make a first impression. Use it wisely.
Marketing is a long-term game
A recession is temporary. Your business growth is a long game. Continue to plan for the future and stay clear on your long-term vision. It’s important as a company to be flexible and adaptive during challenging times.
Knowing whether to pull back or double down on marketing really depends on a multitude of factors, including your company size, market share and industry. By making data-informed and strategic decisions, you can set yourself up for success.
Nioma is a marketing agency specialized in creating brand-driven marketing strategies that boost awareness, build credibility and grow your online presence. Contact us today to learn more.
