It’s no secret that the global economy is facing a recession in 2023. What does an economic downturn mean for your business, and how will that impact your marketing budget? It means you have to cut back on spending to stay afloat in some cases, but is it wise to tighten your belt when it comes to marketing investments?
Many businesses are tempted to hit the pause button on their marketing spending during a recession. As a result, marketing becomes one of the most underfunded departments during a financial downturn.
One survey shows that nearly 75% of multinationals agree that an economic downturn will affect their media spending in 2023. Does this mean it is wise to put digital marketing efforts on the back burner during tough economic times?
The answer is a resounding no!
In fact, it’s important to continue marketing during a recession when everyone else is pulling back. It might seem counter-intuitive, but there are several benefits to continuing your online marketing efforts even during a recession.
In this article, we look at why it’s important to continue marketing during a recession and the best marketing tactics to use to take advantage of the economic climate and actually increase your market share!
How Does A Recession Impact Marketing?
A recession brings multiple complexities that destabilize markets. During a recession, most brands make knee-jerk decisions. For example, focusing on short-term profits as opposed to their long-term interests and the interests of their investors. These include cutting back on current marketing budget allocation and advertising budgets. In turn, this reduces spending but can lead to the loss of existing clients in the long run.
Let’s examine how an economic downturn affects marketing strategies and business growth.
More Pressure On ROI
Market conditions are significantly affected by a recession. Consumers become more cautious and price-sensitive as they consider ways to cut costs. As such, they become more selective in their purchases. Decreased consumer spending puts pressure on companies to prove that marketing expenditures will bring a return on investment by growing the existing customer base.
Due to the fear of a negative ROI, many companies are compelled to trim their marketing costs. They choose to focus only on marketing strategy channels that can produce measurable results.
Having a solid marketing plan from the word ‘go’ prevents knee-jerk reactions to economic downturns. It enables your company to adapt to change and still gain market share while keeping loyal customers. It also makes marketing optimization, which is important during a recession, easy.
To get positive ROI from your marketing strategies during a recession:
- Use innovative marketing strategies. This is the time for strategic and smart marketing moves. Since you need to achieve more with a constrained budget, it is time to think outside the box and develop creative ideas.
- Differentiate yourself from competitors. How can companies stand out from the competition? This is when it pays to understand your consumers’ needs and wants. Make sure you are providing something unique that no one else does.
- Focus on web design and SEO. Web design and SEO will help to increase traffic and boost the visibility of your website. Quality content, attractive visuals, user experience, and SEO will make your website stand out from the competition. Understanding and acting upon your website analytics make this process simpler.
Targeting Changes Due To Shifting Customer Dynamics
People are very selective about what they spend their money on during a recession. Not to mention, you’re already dealing with budget constraints! This means that you don’t have the luxury of trial-and-error campaigns. Therefore, it is important to refine your audience and get laser-focused on who you need to reach with your marketing strategy. This will help you maximize the impact of your marketing investments.
By understanding who they’re targeting, many marketers can tailor campaigns that resonate with potential consumers. Additionally, they can launch campaigns for niche markets or customer segments that are less affected by the recession.
One way of establishing who’s the right target for your products or services is conducting market research before the recession hits. Market research refers to collecting data on consumers’ buying behaviour and preferences.
Marketers can use strategies such as social media listening to find out what audience segment is talking about your products and services and what they’re saying about them. This will help you to come up with campaigns tailored to the right consumers.
Alternatively, you can optimize paid search campaigns for your ads to capture the interest of consumers with a larger buying intent. This will help move them along their buyer’s journey faster.
Need For More Value-Based Marketing
Since consumers cut spending during a recession, marketers should make them feel confident in spending on your business through value-based marketing. Value-based marketing refers to offering value to your target consumers by emphasizing the benefits and features of a product. Value-based messages often include testimonials from existing clients about the customer experience driving consumers further down the marketing funnel.
By understanding what unique value your products or services bring, you can help new clients and potential consumers differentiate between yours and other offerings in the marketplace. This opens up opportunities for them to make well-informed buying decisions.
Some of the powers of value-based marketing during a recession include:
- It is quantifiable. Value-based content marketing lets the customer know exactly what your company is doing for them.
- Creates loyalty. Customers are more likely to stick around if they feel that the product or service is worth their money.
- Drives engagement. Value-based content delivers relevant information and data-rich material that not only improves conversion but also drives engagement.
Why Is It Important To Continue Your Marketing In A Recession?
As we have seen in previous recessions, cutting back on marketing during a recession makes brands less competitive. It also makes it hard for your business to take off again after the recession is over. Most businesses that made it through the last recession in 2008 chose to fine-tune their marketing strategy instead of choosing to stop marketing activities to save money.
Once the recession hits, it’s important to focus your marketing strategy on giving consumers exactly what they need. Marketers find ways to make most consumers feel valued and show them how your product or service can help them. This ensures that you remain top of mind for potential consumers who may convert into new clients and paying customers.
It is important to remember that marketing during a recession should be strategic, not reactionary. A strategy-oriented approach helps brands stay competitive while still cutting advertising costs.
Here’s why it’s important to continue your marketing efforts during this recession:
Consistency is Important
Consistency is vital in all marketing efforts. If your marketing content schedule, quality, and quantity are inconsistent, you will confuse your customers and fail to meet your marketing goals.
Staying consistent helps with brand building and improving your brand’s credibility and reputation, which is crucial to maintain existing clients and attracting new clients. It also helps establish trust and gives your customers a good experience with your brand.
According to Techipedia, brands with consistent messaging are worth 20% more than inconsistent ones.
Analyzing your audience’s behaviour is key. It ensures that you are delivering content at the right time and in the right format to create an emotional connection and drive growth.
Marketing Keeps Your Brand Top of Mind and Retains Customer Loyalty
Just because customers have cut back on spending, it doesn’t mean they are unaware of the brands that keep advertising.
Continuing your marketing strategy helps to keep your brand top of mind and drives customer loyalty. This will help you retain current customers and build relationships with new ones to help your company grow.
Once the recession is over, consumers will buy from companies whose messaging they’ve been constantly exposed to — this is essential to build loyalty.
Keep in mind that there’s decreased competition for media space as companies begin cutting costs across certain categories to reduce spending and cut marketing budgets. This means that you can stay relevant while spending significantly less on advertising costs.
You Remain Competitive
Reducing your marketing budget shows that your business is vulnerable. Competitors who perceive your company as weak can take advantage of this to capture some of your customers. Active marketing shows your competitors that you’re still there.
If you’re worried about not getting returns from your marketing expenditure, keep in mind that most recessions and economic downturns provide ample opportunities for future market share growth. They also give well-prepared brands a competitive advantage over companies that invest less effort before the recovery period.
As other companies disappear or become forgotten due to a lack of advertising, your business can use this as an opportunity to grow its client base while spending less money than you would during periods of higher economic activity. Some of the customers who were working with other companies will be in the market for a new provider. You’ll be able to fill that gap.
As other marketers cut back on their budget, you can continue to push your content and gain more visibility. This helps to establish your brand as a leader in the industry. It gives you an advantage over other businesses with little to no active digital marketing budget.
Grows Brand Awareness
Research shows that downturns result in 47% more new market leaders once the upturn comes. This means that your business has a tremendous opportunity to position itself as a leader. You can grow brand awareness and capture new customers during a recession.
Continuing to publish content will help you reach a wider audience and build relationships with potential customers. It’ll also allow you to stay relevant in an ever-changing market, as people are always looking for the latest information and trends.
It’s important to remember that when it comes to marketing, recession or not, consistency is key. So you should continue to create high-quality content regularly. Doing so will keep your target audience engaged and build a go-to brand for them.
Leverage Your Competitors’ Customer Churn
Customer churn is the number of customers who leave during any given period. During a recession, companies tend to experience higher customer churn due to reduced spending. This allows you to capitalize on your competitors’ losses and increase your customer base.
Some of the reasons for high customer churn during a recession include:
- Seeking cheaper options
- Looking for more value, such as better customer service
- Uncertainty about the future
- Failed businesses
You can use this to your advantage by:
- offering competitive pricing
- providing additional value
- and leveraging customer feedback
This will help you show potential customers that they can trust your business. As a result, you can drive sales during a recession.
Tips For Marketing During A Recession
When the economy takes a downturn, businesses of all sizes have to get creative with their marketing to survive. The good news is that there are still plenty of marketing methods your business can effectively use, even in a recession.
Here are the top tips for marketing during a recession.
Review Each Channel’s Performance
How many marketing channels do you have? A recession offers the perfect opportunity for you to review your marketing spend on each channel and its effectiveness. This will help you determine which channels meet their KPIs and which ones need to be tweaked or abandoned altogether.
Use analytic tools to help you understand which channels yield the highest engagement and conversions. Some of the analytic tools that might prove useful include:
- Google Analytics. This tool is perfect for measuring the performance of your website, ads, and videos. It is a comprehensive analytics platform that provides great insights into your website’s visitor behaviour.
- Social Media Analytics Tools. You can now use a range of social media analytics tools to measure the performance of your content marketing campaigns on various social channels. These tools provide detailed reports on important metrics such as engagement and follower-ship. Tracking these types of metrics can help you gauge the return on advertising expenditure.
Market To Existing Customers
Consumers who’ve done business with you in the past are the cornerstone of your business. This is because they already trust your brand. And if they liked your product, they may buy from you again. So, don’t overlook the needs of existing customers when creating marketing campaigns.
Leverage loyalty programs to keep existing customers engaged. Create email newsletters that offer exclusive deals and discounts. Make sure you remind them how your product or service will continue to benefit them. Also, create personalized messages telling them you value their ongoing support.
Optimize Your Website For Search Engines
Search Engine Optimization (SEO) is the process of optimizing your website to rank higher on search engine results pages (SERPs). This can help you get more organic traffic and increase sales without straining your marketing budget.
There are two types of SEO for websites, namely:
- On-page SEO. This involves optimizing the content and structure of your website to make it more noticeable to search engines. This includes optimizing titles, descriptions, and keywords.
- Off-page SEO. This type involves building quality links on other websites to increase the authority of your website. This includes submitting guest posts, creating social media accounts, and getting featured on relevant websites.
SEO is very important in a recession. It ensures that your website appears on the first page of SERPs when people are searching for products or services related to your business.
The first three results on SERPs get clicks from customers with the highest buying intent. This means your business has a higher chance of getting conversions if you reach the top of the SERPs.
So, make sure that the content on your website is relevant and up-to-date. This helps improve your rankings. Use keywords strategically throughout your website’s content. Also, make sure you only use quality links to get better results.
A great website is a pivotal tool in growing your market share during a recession. It is the first point of contact with your brand when customers search for your products. So, also make sure that your web design is optimized and that visitors can easily find what they need on your site.
Do Not Ignore Local SEO
Local SEO means optimizing your website so that it appears on the SERPs when people are searching for products or services related to your business in a specific geographic region.
Local SEO is especially important for marketing for brick-and-mortar businesses. It helps them reach customers from their local area even with limited advertising expenditure.
Make sure your business has an updated and optimized listing on Google My Business (GMB). Claiming your GMB listing adds credibility to your business and helps you stand out from the competition. It also helps your business appear on the ‘Local Pack’ section of SERPs when someone searches for your product or service.
You should also add your business to local directories and review sites such as Yelp and TripAdvisor. This makes your business more visible to local customers.
Update Your Messaging Based On Spending Habits
Since recessions significantly impact how customers spend their money, it is vital to analyze consumer spending trends. Then adjust your marketing campaigns accordingly.
Monitor spending habits to understand the kind of products or services that are selling well in a recession. By doing so, you can tailor your message and product offerings to meet customer needs.
Putting Recession-Proof Marketing Strategies to Work
Marketing during a recession is still important for businesses and should not be put on pause. Instead, marketers should focus on offering customers value, building loyalty and increasing brand awareness.
For successful marketing, digital efforts are more important in times of economic uncertainty. They can help you survive the downturn and come out stronger.
By creating more streamlined and targeted campaigns, you can ensure you’re getting the most from your marketing and advertising budget.
And don’t forget to focus on your web design and SEO efforts. This will help to keep your business visible on the search engine results pages.
By optimizing your website design and content, you can ensure your business shows up when people search for products or services you offer. This is an ideal way to drive traffic and conversions organically without spending more money on top of your marketing.