Marketing During an Economic Downturn

The expectation of an economic downturn has caught businesses off guard as they prepare to face its consequences. However, it's surprising that many companies opt to reduce their marketing budgets when economic hardships lead to decreased sales and revenue losses.

Strategies for Marketing Success During Economic Downturns

Cutting back on marketing expenditure and carefully restructuring the budget to adapt to changing economic conditions are two distinct approaches with varying outcomes. Choosing the latter ensures the long-term sustainability of your business.

So, why do businesses opt to compromise on marketing? How should they strategise instead? We explore these questions and more in the following section.

During a recession, other expenses take precedence, relegating marketing investments to a lower priority. Paying employee salaries, maintaining operations, adopting new technology, and upholding critical contracts are deemed more crucial for business survival.

Moreover, companies fear that promotions and advertisements during this period may alienate customers who are exercising caution with their spending and are attentive to how brands position themselves amidst economic turbulence.

Contrary to these concerns, research by McGraw-Hill revealed that B2B organisations that maintained or increased their marketing budget during the 1981-1982 recession experienced significantly higher sales during and after the recession.

?So, how can marketers prioritise and implement strategies that promote business growth during and after a recession? Here are five strategies to capitalise on:

5 Approaches to Marketing Your Business During an Economic Downturn

Customer Marketing

Did you know that even a 5% increase in customer retention can boost company revenue by 25-95%? This underscores the importance of customer marketing – targeting existing customers – during an ongoing recession, where the focus is on achieving more with reduced spending.

Starbucks exemplified customer marketing during the 2008 recession. The global coffeehouse chain centred its recession-combat strategy on customers, allowing them to provide feedback to enhance the 'Starbucks' experience. Moreover, the brand introduced the Gold Card reward programme to reward its 'super users' with complimentary items and other in-store perks during the peak of the 2008 recession crisis.

This strategic approach to customer marketing not only fostered customer loyalty but also enabled Starbucks to emerge from the recession stronger than before. Here are some tips to effectively execute customer marketing in the face of an impending recession:

• Personalise emails to maintain a personal connection with existing customers by sharing relevant information and offers.
• Enhance customer service by providing additional value, offering free enhancements to existing features, or providing detailed analyses of customer issues and demonstrating how your product or service can solve them.
• Offer discounts or incentives to encourage customers to refer your brand to others (get decision-makers on board with these objectives).

Existing customers are pivotal to future revenue growth, as they have the potential to influence the purchasing decisions of potential customers. Investing in customer satisfaction and maintaining a healthy retention rate is essential for building business resilience during a recession.

Content Marketing

Shifts in customer behaviour, preferences, and buying habits necessitate a new approach to conveying your marketing message. Rather than changing your vision and mission, it's about finding a different and more relevant way to communicate. This can be achieved through the creation of impactful content that resonates with audiences.

With 70% of customers preferring to learn about a brand through content rather than advertisements, content serves as the conduit through which you can reach your target audience without significant spending on paid advertisements.

Delivering your message to target audiences must be done thoughtfully during a downturn. Ensure that your content reflects recent market trends and resonates with customers, demonstrating how your brand can help them navigate crises.

Need inspiration? Salesforce, one of the largest cloud-based software companies, established the 'Leading Through Change' resource centre, offering blogs, webinars, videos, and e-books to assist businesses in overcoming the economic challenges induced by the pandemic in 2020-21. HubSpot also followed suit by launching 'Adapt 2020' to help businesses adapt to the changing environment through educational content.

• How can you enhance your content strategy during a recession? Here are some tips for optimal results:
• Develop content for every stage of your customer funnel to engage your audience and encourage them to become customers.
• Maintain a positive and empathetic tone in your content, considering the sensitive mood of your customers during a downturn.
• Repurpose your top-performing content to increase traffic to your website and enhance the likelihood of generating more leads.

As content marketing is more cost-effective and generates more leads than traditional marketing, it represents a sound investment during a recession. While you may not see immediate results, rest assured that your content strategy will eventually lead to more conversions. In the meantime, continue creating content to educate your audience and maintain top-of-mind awareness.

Conversion Rate Optimization (CRO)

As the recession tightens its grip on the economy and businesses struggle to stay afloat, it's prudent not to rely solely on one strategy. While paid advertisements may drive significant traffic to your website, it's risky to allocate all your resources to this channel, especially in a cash-strapped environment.

Although organic marketing methods can drive substantial website traffic, converting that traffic into leads poses a challenge. This is where Conversion Rate Optimization (CRO) comes into play. With CRO, businesses maximise existing traffic without increasing spending on ads to drive website traction.

For instance, suppose you believe that adding a guest checkout option will reduce drop-offs and encourage purchases on your website. In that case, you can test two experiences against each other (the control without guest checkout and the variation with guest checkout) to determine which one yields better results in terms of driving revenue conversions. Naturally, you would proceed with the experience that demonstrates a higher probability of conversion. Thanks to A/B testing, marketers can improve key metrics that influence critical business decisions during challenging times.

While A/B testing is one component of CRO, the latter encompasses a broader process of enhancing user experiences. In times when conversion rates are declining and user purchasing habits are changing, CRO empowers businesses to identify optimization opportunities and improve conversions.

Search Engine Optimization (SEO)

Over 70% of B2B customers initiate their product research on Google search engines. How does this affect your SEO strategy during a recession? The answer is simple: when customer needs and behaviours change during an economic downturn, conducting keyword research and monitoring search trends enables you to tailor your content to address customer needs, fostering greater engagement and convincing them to invest more in your brand.

You may also conduct content audits and optimize select pieces with SEO keywords to ensure their relevance to the current market environment and resonate with your audience. These concerted efforts will improve the online visibility of your content and ensure that it reaches readers seeking the most relevant answers to their search queries.

Furthermore, now is the opportune time to address neglected SEO strategies while your competitors are deliberating whether to take action. By enhancing site speed, crawlability, link building, and indexation, among other SEO tactics, you can gain a competitive edge.

Like content marketing, SEO takes time to yield results, and its impact on business revenue may not be immediately apparent. However, both of these organic marketing activities are cost-effective alternatives to paid advertisements while facilitating long-term brand awareness. Therefore, ensure that your SEO efforts remain robust during this period, as their results will endure beyond the recession when the economy rebounds.

Co-Marketing

In today's interconnected business landscape, operating in isolation is no longer viable. Collaborating with like-minded individuals, fostering relationships, and establishing industry authority are essential objectives. Co-marketing plays a pivotal role in achieving these aims.

While running a co-marketing campaign presents challenges, such as finding the right partner, aligning common goals, and coordinating schedules, its potential impact on audiences cannot be overstated. When executed effectively, co-marketing campaigns leave a lasting impression on audiences.

Wondering if co-marketing is worth pursuing during a recession? Consider how Netflix and Xbox collaborated in 2008. Through their partnership, Xbox Live Gold subscribers gained access to on-demand TV shows and films from Netflix. This mutually beneficial arrangement allowed Netflix to tap into millions of Xbox members, while Microsoft seized the opportunity to promote its gaming product to a broader customer base.

Amidst the challenges of a recession, co-marketing can also be cost-effective, as both brands can pool resources instead of bearing marketing costs individually. From creating shared content such as eBooks, webinars, and blogs to co-hosting product launches online or offline, co-marketing enables your brand to attract attention, ultimately contributing to long-term revenue growth.

Adjusting marketing priorities is not merely a recession-friendly strategy; it reflects how businesses establish, value, and maintain relationships with customers during challenging times. From a business perspective, adopting such a mindset enables companies to be proactive rather than reactive to changes in their environment, turning obstacles into opportunities at every turn.

As evident from our discussion, marketing teams can play a pivotal role in helping companies navigate a recession successfully. However, before delving into various strategies, start with A/B testing to eliminate uncertainty from decision-making and embrace data-driven marketing during critical periods.

Waste no time and embark on your journey to success today. Good luck!