By now, you might already be aware that the US economy is on its way to a recession.
Just a couple of days after the International Monetary Fund (IMF) forecasted a global recession, official results showed that our economy shrank for the second consecutive quarter.
The reasons? The pandemic and ongoing war in Ukraine – according to IMF’s Economic Counsellor and Director of Research, Pierre-Olivier Gourinchas.
So, what does this mean for businesses? Bad news, obviously.
In the face of a recession, the first thing companies do is to look for ways to cut costs until the economy recovers. More often than not, they immediately find themselves questioning the worth of their marketing budget. It’s not uncommon for businesses to reduce their marketing spending during an economic downturn.
They have this notion that their funds are just being put to waste if they market to their target audience. This is because business owners expect people to buy less due to the economic situation. This is not the case. It never has been.
As a matter of fact, history has taught us that marketing during a recession can work wonders for brands. It helps them grow faster than it would in a more stable financial climate. Like the majority, you might be skeptical about it, and we totally understand.
By the time you’re done reading this, you’ll see why it’s necessary to continue investing in marketing in the midst of a recession, and why it’s a big no-no to cut your marketing budget. Plus, we’ll share a couple of proven strategies that will help you make the most of your budget during an economic downturn.
Let’s get to it!
You might be surprised to learn that maintaining or increasing your advertising spending when the economy’s not doing well can lead your business to flourish.
Take Amazon, for instance. During the 2008-2009 recession, founder and CEO Jeff Bezos never bothered to take a break. Instead, the company kept innovating with new products and even went on to launch Kindle.
Such a risky move caused the world’s largest online retailer to increase its sales by 28%. Not only that, but the decision also led Amazon customers to buy more e-books than printed books!
Sure, marketing in a recession can be challenging, especially since you’ll be going against standard operating norms. But it presents a fantastic opportunity at the same time. It’s the perfect opportunity for you to achieve two things: providing your ideal audience with what they need most in a financial crisis and cementing the loyalty of your existing customers.
So, if you’re this close to slashing your marketing budget and pulling the plug, you better get rid of that thought now. Here are four reasons why:
When you put a halt to your marketing efforts, your customers might end up forgetting about your brand. Regardless of the economic climate, reducing your marketing will damage your business in the long-term, and that’s the last thing you want to happen.
Keep in mind that you connect with your customers through your marketing efforts. Without these customers, your sales will likely drop.
On the other hand, keeping your marketing budget stable or increasing it provides your business with the possibility to gain more conversions. A recession means less competition for your ads!
Odds are, your competitors will be pulling back on their ad spending. This is your best chance to promote your business without worrying too much about the big names you’re up against. All eyes will be on your ads, that’s for sure.
Be sure to focus on your brand image and highlight what sets you apart from the rest. That way, more and more prospects will be interested to learn more about you and what you have to offer.
Even if many people will be shopping less, they’ll still find ways to buy from their favorite brands. They’ll look for discounts, bulk purchases at a cheaper rate, or they’ll simply wait for the next sale.
That being said, you want to be there for your customers. Let them see that despite the devastating economic situation, you continue to serve them. That’s a surefire way to strengthen their loyalty.
Although marketing to your fullest capacity in a recession is far from possible, there are still ways to ensure that your business thrives within its budget. Below are five of them:
Leaning on consistent branding is key to keeping your business alive and kicking during an economic crisis. With it, you get to communicate your message clearly, connect your prospects with your products emotionally, and ultimately motivate them to make a purchase. Not to mention, it confirms your credibility and builds loyalty.
With more and more people turning to the internet to search for products and services before deciding to buy, investing in SEO has become more crucial than ever.
In case you’re not familiar, SEO is a process that aims to improve your website’s ranking on search engines like Google. The higher you rank, the more traffic you drive to your site, the more quality leads you attract, and the more credible you are in the eyes of your ideal audience.
If there’s one true asset during a recession, it has to be a loyal customer base. As we’ve pointed out above, your frequent clientele will look for you. So make it a point to exert more effort in marketing to them, rather than trying to win new ones (though you’re always more than welcome to try).
Advertising to your existing customers isn’t just simpler and more effective, but it’s more cost-effective as well. Attracting a new consumer can cost five times as much as keeping an existing one, and it can be up to 30x the marketing cost. Think about all the money you can save when you focus on customer retention!
Recessions can either benefit or hurt a business. Some suffer, while others actually prosper.
If you’re selling basic necessities, consider yourself lucky as you’ll always have people ready to buy from you. However, if your goods don’t belong in the “must-have” category, you’ll have to reconsider your offerings or at least, include some essential items and/or services.
Just because the nation’s about to get in a recession doesn’t mean that you should pull your marketing budget altogether. Believe us when we say that you’ll have the upper hand, especially once the economy recovers. Then again, we’re pretty sure that the reasons mentioned have already convinced you to keep going.
If you need professional assistance in online marketing, we’re here for you. Our dedicated team can help take your website to the top of search engine results pages, create quality content to engage your prospects and existing customers, turn clicks into clients, and so much more.
Book a free consultation with us now! We can’t wait to work with you!