Recessions, and even simply the possibility of recessions, have a direct effect on marketing.
In particular, B2B marketers face difficulties in spotting a downturn because their sales cycles tend to stretch out over a more extended period (over 6, 12, or even 18 months), and there are no apparent shifts in the market. However, when entire industries experience a downturn, B2C and D2C marketers tend to notice it more quickly.
In this article, the experts at our digital marketing agency in Nashville will discuss how a looming recession affects B2B marketers and the key factors to consider when navigating this landscape.
During a recession, marketing is one of the first areas of a company to feel the effects. It's lower on the list of priorities than production, sales, and customer experience.
It's not that marketing is useless; instead, recessions put marketing in the spotlight, forcing marketers to find new ways to demonstrate the return on investment (ROI) they generate.
During a downturn, a marketer's ability to generate value for the company and make a case for additional investments may be compromised by the following problems.
Sales opportunities tend to rise in tandem with a bull market, which is good news for marketers. Customers are in a good financial position, so they are willing to make purchases despite the decreased effectiveness of marketing.
These natural openings dry up during a recession, putting extra stress on marketers to prove their worth by tracing sales back to their efforts.
This context makes it challenging for marketers to measure return on investment because:
When properly implemented, each method provides an accurate depiction of revenue attribution.
When consumers lose faith in a company, they become more price-conscious and reevaluate their purchasing decisions regarding value. Most people are curious whether their investment is yielding the best possible return.
Especially if your current marketing strategy is feature-based, you may see a drop in effectiveness due to this change. Promoted messaging may not be as effective as other types of marketing.
Therefore, marketing during a recession presents the exceptional difficulty of shifting to customer-centric value-based marketing by modifying content, messaging, and objectives to demonstrate value better and cultivate trust.
Demand generation and other one-to-many advertising strategies do well when the market is strong. More leads are available in the market, making it easier to acquire leads.
However, in a bear market, such efforts are equivalent to a spray-and-pray strategy—which is usually ineffective.
Account-based marketing (ABM) may fare better in a lead-poor market because of its focus on relationship-building and value-based marketing. However, ABM still needs to eliminate the need for demand generation.
B2B marketers need to find a middle ground between demand generation and account-based marketing (ABM) during a downturn, considering revenue attribution, internal resources, and overarching sales and marketing objectives.
If you want to succeed in marketing during a downturn, you need to rethink your approach to take into account the challenges presented by the new realities of the market. Nonetheless, assessing the current situation and position is essential before making any drastic changes to marketing strategies.
Our Nashville-based digital marketing agency is confident that the following recession-proof marketing strategies can be adapted to meet the needs of any business, regardless of size, industry, or location.
Since recessions can last anywhere from two to ten years, a "ride it out" mentality is risky, especially if the business is losing money at an alarming rate. When it comes to advertising, this way of thinking is essential.
Marketers with closed minds might think it's best to stick with the same strategies and tactics even though the industry around them has evolved.
Realizing things can no longer be conducted as usual is a necessary readjustment for accessing the remaining tactics. A shift in marketing's mentality and culture can usher in greater agility.
As an illustration, they can adopt a culture of better sales and marketing alignment and a mindset of experimentation and small data-driven gambles to become more nimble.
In contrast to conversion tracking, which merely measures action, revenue attribution establishes a causal link between the results of a campaign's marketing efforts and monetary gains.
Because dollars are more important than clicks when in survival mode, knowing which marketing efforts generate revenue is crucial during a downturn.
Revenue attribution is critical during tough economic times to counter the widespread belief that marketing incurs unnecessary expenses. To win the competition for limited funds, marketing experts at our digital marketing agency in Nashville recommend that you prove your marketing efforts' success by showing how your spending has increased sales.
A compelling argument can be made for continuing or increasing marketing spending if efforts are made to improve revenue attribution and generate correlative data.
The term "account-based marketing strategies" has seen a 60% increase in search volume between 2021 and 2022, indicating a shift in emphasis among marketers.
Research from MarketingProfs also shows that businesses with well-integrated account-based marketing strategies enjoy a 208% increase in marketing revenue.
ABM is a method for strategically integrating sales and marketing efforts to grow and nurture key accounts by focusing on individual relationships rather than broad demographic groups.
In a down economy, account-based marketing (ABM) is essential for preserving revenue from critical accounts by strengthening trust and relationships while efficiently pursuing carefully selected new accounts. However, before committing to ABM, marketers must determine if it makes sense for their organization.
A more conventional demand generation strategy may be more appropriate for companies that do not qualify as "challenger brands," such as those that dominate their respective markets or niches.
In the preceding sections, we discussed the effects of a recession on marketing and the steps you can take to improve your marketing efforts in the face of a down economy.
Here is a quick rundown of some crisis-proof marketing strategies:
As previously stated, most recessions follow a cyclical economic pattern of strong growth followed by a downturn. What distinguishes this recession from previous ones is that it is unclear how long it will last because there is no single cause. Instead, there is a confluence of post-coronavirus-pandemic factors.
Marketers must modify their short-term marketing plans, strategies, objectives, and advertising budgets to account for emerging market shifts and better meet customer needs.
We at Digital Resource recognize this need. Our Nashville digital marketing agency experts are here to help you course-correct for better results while staying within your online advertising budget and cost-effectively winning more business.
Contact us today for a free consultation.