Hey, we get it. Hearing your marketing agency say that you should continue marketing, or even increase your marketing efforts during a recession, can feel tone-deaf. After all, many businesses are forced to reevaluate, or even cut, their marketing strategy during tough financial times.
But the truth is, recessions present unique opportunities for smart marketers. In fact, some of the most successful brands in history–think Kelloggs, Amazon, and LEGO–have seen massive success during economic downturns.
So, what's the trick? How can you manage your marketing strategy during a recession to ensure your business not only survives, but thrives? Let’s find out.
Remember above, when we mentioned Kelloggs found success in a recession? Well, it was a little more impressive than that. Kelloggs made it through the Great Depression with not only its brand intact, but it earned a better spot in the market. Unlike its biggest competitor at the time (Post) Kelloggs decided to double its ad budget, leverage radio advertising, and promote its exciting new cereal, Rice Krispies. By 1993, Kelloggs had improved profits by almost 30%!
Cutting your marketing budget is often a knee-jerk reaction during tough economic times. But, if you do it without carefully considering the long-term effects, you may find yourself at a competitive disadvantage when the economy eventually recovers.
Instead of cutting your budget, look for ways to optimize your spend and make sure you are reaching your target audience. If you do need to make cuts, look for areas where you can trim without affecting your long-term strategy.
Of course, not all companies have the luxury of being able to increase their marketing spend during a recession. If that’s the case for your business, there are still plenty of things you can do to ensure your marketing strategy is effective.
First and foremost, you need to understand that your customers are changing. It doesn't matter if you're B2B, B2C, or D2C–your customers' needs, wants, and buying habits are going to be different during a recession.
This means that your marketing strategy needs to change as well. Take a close look at all of the projects you have ongoing right now. Are they still relevant? Do they need to be tweaked or completely reworked? Projects that don't meet the needs of your new customer base should be put on hold until the market improves.
Honing in on your data will give you the answers you need to adjust your marketing strategy accordingly. Look at which channels are bringing in the best ROI and focus your attention there. As well, take a close look at customer lifetime value (CLTV) and consider what you’re doing to retain your best customers. During a recession, customers are more likely to stick with brands they know and trust–brands that have provided them with value in the past. This is the time to focus on retention and loyalty, rather than acquisition.
Just because money is tight doesn't mean you should stop investing in your business. In fact, this may be the perfect time to invest in long-term projects that will pay off down the line.
If you've been putting off a website redesign because you don't have the bandwidth or the budget, now might be the perfect time to do it. This will also help ensure your website and messaging reflects the needs of your new customer base.
Experimentation and testing should also continue to be a part of your strategy, but you may want to dial it back just a little bit. We like to use the 80/20 rule here–focus 80% of your time on proven channels and tactics, and 20% on testing. Testing is important for growth and staying competitive, but during a recession you may want to focus a little more on the tried and true.
No one wants to go through a recession alone. Whether you're managing an in-house marketing team or working with an agency, now is the time to lean on your people.
Your team should be composed of people who you can trust to help you make tough decisions and see your projects through to the end. If you don't have that kind of relationship with your current partners, now is the time to find ones that you can rely on. If you're working with an agency, don't be afraid to ask the hard questions. The worst thing you can do in times of economic uncertainty is to surround yourself with people who will tell you what you want to hear instead of what you need to hear.
It's also important to have realistic expectations. The reality is that marketing budgets are often one of the first places that companies look to cut when they're trying to save money. So, if you're expecting your team to do more with less, you're setting them up for failure.
Instead, focus on what you can realistically achieve with the resources you have. And, be honest about the challenges your team is facing. This will help build trust and ensure that everyone is on the same page.
In cases of restructuring, consider ways you might outsource your marketing so you don't lose out on important opportunities. Agencies, freelancers, and consultants can be a great way to supplement your team's skills and knowledge.
A recession is absolutely the time to invest in technology that will automate repetitive tasks and free up your team's time. This will allow them to focus on more strategic initiatives. This can include anything from marketing automation software to a CRM system.
Here are a few ways you can use technology to your advantage:
This is just the tip of the iceberg–there's so much great technology that exists. Never stop exploring new innovations for your business.
Your competitors are also feeling the effects of the recession. Keep an eye on them to see how they are changing their marketing strategy. If they start to cut back on advertising, this could be an opportunity for you to gain market share. If they start offering discounts or sales, you may need to adjust your prices to stay competitive.
When Kelloggs saw Post cereals cutting back on advertising, they doubled down on their own ad budget and saw an increase in market share. Nasty Gal achieved $300 million in sales during the Great Recession, beating out Apple, Amazon, and Macy’s.
If you see your competitors scaling back, ask yourself if there are ways you can take advantage of the situation. Could you increase your advertising? Can you give them an offer they can’t refuse? There may be opportunities to come out on top during a recession if you’re willing to be bold.
Want to know the biggest secret to managing marketing strategies during a recession? Don't stop. Keep doing what you're doing and be strategic with your decisions. It's no secret that companies that maintain or increase their advertising during a recession see greater market share growth than those who cut back.
In cases where cuts are necessary, be strategic about where you make them. And, when you're looking at your budget, don't just look at the bottom line. Consider the long-term effects of your decisions. A recession is temporary, but the effects of your marketing decisions will be felt for much longer.
If you need help preparing for the recession, or simply want to improve your marketing efforts today, we can help. Contact us to learn more.
To create is to live twice.