Very quickly can a booming period turn into a challenging time for businesses and consumers alike - something made very transparent following the COVID-19 pandemic.
Historically, it is proven that treating marketing activities today as an investment rather than an expense is the ideal way to safeguard tomorrow's sales and revenue. You could consider the reasons why you should hire a digital marketing agency to provide strategic and analytical recommendations to get the most out of your marketing spend, or alternatively, how your in-house team can achieve the greatest return on investment.
Companies that maintain or increase their marketing spend during an economic downturn often emerge stronger than those who reduce it. This idea is supported by many industry leaders and market research.
While it may be harder to win new customers and generate opportunities during a recession, there is untapped potential for growing market share through strategic marketing efforts. By investing in marketing during tough economic times, you can position yourself to capture a larger market share when the economy begins to recover, ultimately leading to increased revenue.
In short, when it’s time for your audience to buy, you need to be in the conversation.
While your target audience may remain relatively the same, their behaviors, attitudes, and purchasing habits are likely to evolve when times are tough. They might have reduced disposable income, engage in shorter or longer buyer journeys, or they could even find more value in your product or service than ever before. It's crucial to view your customers through the lens of the recession and understand how they act, think, and purchase in the current economic climate.
If you’re in an industry where your target audience and buyer personas are directly being impacted by the effects of the recession, you can speed up your learning about their needs by asking a simple question; “How can I help?”.
The best part is your ideal consumer will tell you everything you need to know about how you product/service can help them. Their feedback can guide your actions in optimising your sales funnel, tweaking your offers so that they are appropriate for your consumers, updating or refining your products/services, and how to improve your customer service experience.
While brand building is important for long-term success, it may not be sufficient to generate enough leads in the current moment. Crafting compelling offers that resonate with your target market in the context of the economy and market conditions is crucial.
Look at the reasons your current customers buy from you. You will receive even greater learnings by researching why consumers didn’t buy from you. Take these findings and use them to shape your messaging, channels, and overall strategy.
A well-structured sales funnel maximises the potential of every prospect or lead that interacts with your business.
In reality, only a small percentage, typically 3-5%, of your market is ready to make a purchase at any given time. You need to have a solid plan for how you will nurture the remaining 95-97% of your target market:
It is crucial to create a solid recession marketing strategy that aligns with the current macro and micro environment. Consider how the market and your consumers' purchasing habits have changed. Assess the available time, budget, and resources you have in-house to execute your marketing strategy effectively.
Moreover, identify short-term marketing efforts that can lead to long-term success. This includes brand awareness activities, growing your database to nurture your contacts, improving the weak touch points in your sales funnel, or ultimately increasing the customer experience of your leads. This will heavily differ based on your specific product or service, and whether you are a company engaging in B2C or B2B marketing in a recession.
Take a closer look at the tools and platforms you're paying for—are you actually using them to their full potential? Are there more affordable alternatives available in the market? By reassessing your marketing technology (martech) stack, you can identify which tools are essential for streamlining your processes and which ones are simply eating away at your budget.
Take a critical look at your advertising efforts and determine if you're getting the desired return on investment. Are there channels or campaigns that are not delivering the expected results? What digital trends can you captalise on and which aren't working for you at the moment? By identifying areas of media wastage, you can reallocate your budget to more effective strategies and tactics.
While performance marketing focuses on bottom-of-the-funnel activities to drive immediate conversions, investing in brand building can have long-term benefits. Consider reallocating a portion of your budget from performance marketing efforts to brand building activities. For many businesses, a split of 40% performance and 60% brand building works well, although this ratio may fluctuate based on your industry or business.
Investing in strong brand activity is particularly valuable during a recession because many of your competitors may have scaled back their brand building efforts. By maintaining or increasing your brand building initiatives, you position yourself to capture the attention and loyalty of your target market, even if they are not ready to convert immediately. Remember, by investing in building a strong brand presence, you are preparing customers to choose your business when they are ready to make a purchase in the future.
At the end of the day, recessions are unpredictable and nerve-wracking for businesses and consumers alike. Consider what effort and resources you can invest in your marketing today so that you will be reaping the benefits in two-five years to come!
David Lawrence is the MD and Co-Founder of Rocket, an award-winning Australian digital marketing agency. He is also the co-author of the Amazon #1 best-selling marketing book 'Smarter Marketer'. David has presented at several events including Inbound, Search Marketing Summit, Mumbrella360, CEO Institute and a variety of seminars and in-house sessions.
David has built his expertise from a diverse career, starting with an economics degree before jumping into all things web in the late 90s.
Today, David is Rocket's Managing Director and is known for his ability to find clarity in the bigger picture. He is highly respected as a digital marketing authority, sharing his expertise with an extensive network here in Australia and around the world.