As I write this in July 2022, consumer confidence in Australia has plunged to levels not seen since 2009 (excluding the COVID crisis). The cost of living is soaring, partly because of a big jump in inflation, and partly because of global and climate pressures. Interest rates are on the rise and the share market continues to record massive falls.
Understandably, there is concern about whether we’re heading towards an economic cliff. It's a nervous time for businesses and consumers alike.
The reality though is that the economy runs in cycles. Yesterday’s boom is tomorrow’s bust. This predictability means we can look back and see the behaviours most likely to succeed in good times and in bad times.
History has shown that businesses that continue to invest in their marketing when the economy is down are the ones that thrive when spending is back up. Despite this, many businesses continue to make the mistake of cutting marketing expenditure during tough times. When you treat marketing as an expense rather than an investment, you are making the deliberate decision to put tomorrow's sales and revenue at risk.
If you want to look back in two years' time and know you squeezed every last drop of opportunity from your competitors' decisions to reduce marketing spend, then read on. I’ll take you through 10 steps that are key to growing your market share, starting today.
Articles like this and this from the Harvard Business Review, demonstrate that companies who maintain or increase marketing spending during poor economic times emerge stronger than those who reduce it. The trouble is that a lot of people don’t know how to do this properly, or their business panics and they cut back anyhow.
It’s easy to hear feel-good messages about the benefits of marketing in tough times and think they are true. But you need to believe it. You need to understand how it works. You need to get to the point where you're vigorously arguing with stakeholders that now is the time to invest more in sales and marketing than ever before. If your industry is about to struggle, then there is untapped potential to grow market share via marketing starting today.
Here’s a graph to get started. See the right hand columns? They represent the companies that increased their marketing investment during recession. They grew. See the other columns? These represent companies that maintained or reduced their marketing spend. Don’t be one of those companies.
And here are the views of some better qualified people on the topic.
There is a good chance your market is going to shrink in the coming months. It’ll be harder to win new customers and generate new opportunities.
Here’s the reality though. When this is over, and things start to recover, regardless of the speed of recovery, most of these customers will again want to buy what you sell. And when they do, a lot of them will research the market and give their business to whomever they think can best solve their problem at that time. This will very often not be the company they used to do business with.
Win more of this business, or be known by more of your customers than your competitors, and you’ll grow back faster than they do. Your market share will have increased and ultimately so will your revenue.
But it starts today by making sure that your prospects (including ex-customers) are aware of you and your offering. This is where marketing comes in. When it comes time to buy, you need to be in the conversation.
Here’s a final thought.
Do your business a favour, be the aggressive marketer. If you aren't responsible for setting marketing budgets, share the commentary above with the people who are.
Without careful planning and execution, it’s unrealistic for most businesses to expect an increase in market share, especially if they continue to do things as they always have. You need to adapt by creating a B2C or B2B digital marketing plan that is receptive to the changing environment.
Here are some digital marketing strategy tips:
Here are some possibilities:
It’s likely your perfect customer and key personas will change during tough economic times.
You might be dealing with the same people as before, but chances are they’ll have different pressures and a different way of making decisions than they did when times were easier. You need to understand these changes if you are to continue showing value in not only your offering but also your marketing.
You might lose some existing customers as their personal budgets are reduced. The customers you lose may become a windfall for another business who does what you do, only cheaper. If this is the case you might find a whole new audience of people who have fallen out of more expensive offerings and now find you perfect for their current needs. Marketing is likely the best way to find these people and convince them you have something of value to them.
Once you understand how your key personas have changed, it’s time to review your entire marketing engine. Changes need to be made to ensure you’re hitting the right people, with the right message at the right time in the right place.
Even in a recession, most industries shrink very little. Often we’re talking about single digit % changes. This means there are still a lot of people spending money and making decisions between you and your competitors each and every day.
To succeed, you often just need to do better than your competitors. Their market share is your opportunity.
One of the most important things you can do is ensure that when a paying customer is doing their research or making a decision, you’re putting your best foot forward.
When was the last time you did a full audit of everything you do in marketing?
Before you make radical changes to your campaigns, ensure that parts of your marketing you know are working are in peak condition. You’ll be surprised by what you’ll find if it’s a while since you’ve done this.
A crisis is a great opportunity to get lean and only invest in things that matter. What we want to focus on here are the changes you should make to how you spend money in marketing.
Marketing technology (martech) has exploded in recent years bringing incredible power and automation to smart marketing teams. But I can almost guarantee you’re spending money on martech that doesn't generate justifiable value. Review these expenses with an eye to value. We are not saying kill martech spend, far from it, it is fundamental that you have the appropriate marketing automation and CRM platform(s). We are saying that virtually every business is paying for some systems and software they don't use.
For many businesses, bottom-of-funnel media budgets (money spent on finding people ready to buy right now) won’t generate the same return during tough times as they did when things were booming. Consider reducing (but not cutting) poor performing campaigns for the time being. But be ready to ramp them up again when demand justifies it.
Conversely, there are wins to be had by increasing your spending in those activities which grow your brand in the eyes of your prospects. This is largely because your competitors in many cases will have slashed brand building strategies. You’ll be able to achieve an increased share of voice with substantially less competition than before. This share of voice can be converted into market share both during an economic crisis and afterwards.
Despite what you might hear, digital marketing is not 100% accountable and data doesn’t always tell the full story. But one thing that is always true, is that every media campaign will include its own level of inefficiency and waste.
You don’t want to spend on advertising that is clearly ineffective. In truth this can be a challenging thing to measure, particularly when it comes to building awareness for a brand. Regardless, you should critically review all media budgets.
Here’s an interesting observation from the last economic crisis marketers faced:
As we enter a new period of economic uncertainty some advertisers will take similar actions to those they took last time, and for that matter the time before. As money leaves different forms of advertising, the cost of amplifying your message should become more cost effective. Find those campaigns which are generating a return, or effectively growing your share of voice, and move budget from poor performing areas to them.
If you have the ability to buy cheap advertising which generates a return on an important KPI then buy it while it’s on sale. Let your competitors’ fear, or budget constraints, be your opportunity.
In addition, you should consider increasing your investment in brand building activities like content creation and amplification, remarketing, display advertising, and video advertising.
If you’re in an industry where your prospects are likely to be heavily impacted by economic uncertainty, then here’s one of the most effective marketing tools you have at your disposal right now:
"How can I help?"
That’s right. A simple question. You need to ask this of your customers and prospects. They will answer you and provide you with incredible insights into your market. For free.
The things you learn will provide you with actionable insights you can apply to your sales funnel, your offers, your product, your customer service and more. Importantly, a lot of your competitors won’t be asking this question. As a result, their offering will be less effective in solving your prospects current problems.
This is a key part of surviving an economic crisis and thriving during the recovery. Simply letting people know you exist is rarely good enough when it comes to attracting prospects, let alone converting them into opportunities or paying customers.
Your offer is the way you wrap up your product or service into a nice package. It’s how you make what you’re promoting irresistible to your perfect prospects.
You need to craft a compelling offer that makes sense in the context of today’s economy. You need to revisit this offer as things change and when the recovery starts. In all cases, your offer needs to drive prospects to want to take that next step.
Here are some of the most effective ways to do this:
The best way to craft your offer is to build out a list describing how each of these elements might work for your product or service. Then, based on what you know about your personas and your product or service, develop an appropriate offer strategy. You might use one of the elements mentioned in the list above, or you might use a combination.
You might be uncertain about which elements will work best for your product or service right now. Our advice is to experiment with the ideas you think are most likely to work. You should also look at the reasons existing customers already buy from you. If you’re not sure, then speak to a sample of these people. Existing customers can provide valuable insights into effective future offers. Learn what is most likely to change behaviour and go from there.
Ryan Deiss of Digital Marketer describes a sales funnel as a “multi-step, multi-modality process that moves prospective browsers into buyers”.
A sales funnel is a step-by-step process for making the most of every prospect that comes into contact with your business. It often involves stages including:
The reality is that only a small percentage of people who view your website are ready to buy today. For most businesses, it’s less than 3% of all visits. A sales funnel is the way for you to capture as many of the other 97% as possible.
The goal is to be able to nurture, and ultimately sell to, your entire market when the time is right for them to buy.
We remain stunned by the number of otherwise smart companies who allow their sales and marketing teams to exist in separate silos. It makes no sense.
According to the Harvard Business Review “when Sales and Marketing work well together, companies see substantial improvement on important performance metrics: Sales cycles are shorter, market-entry costs go down, and the cost of sales is lower”.
Keep them apart and you’ll not only lose the above, but you’ll also give people in both teams the ability to blame the other for poor performance. You’ll find it hard to ever know where the real problem exists. During good times small cracks can be papered over through targets being met. This is unlikely in the coming months for most businesses. Cracks will appear, the blame game will start and your business will suffer. Front foot this now.
Do you have sales people who use the quality of leads as an excuse for missing their sales targets? How about marketers who tell you that revenue is down because the sales team aren’t making their calls or doing their job properly?
By keeping these teams separate you are encouraging an Us and Them culture. There is not a single reason this is a good idea. This should never be acceptable in any company. But in the current climate, it will severely limit your ability to make the changes needed to grab market share.
We believe marketing has a key role to play when it comes to thriving through a crisis. This is backed up by history. Genuine opportunities exist to those who know how to market effectively through tough times.
If you have the skills in-house to make this happen then we’re genuinely excited for you. If you’re onboard with the concept, but need some advice or assistance to make the most of the opportunities, then we want to talk with you. If there is anything the team at Rocket can do to help, or any question we can answer to help give you clarity, don’t hesitate to be in touch.
It goes without saying that we’re happy to share our experience and thoughts if it helps you get moving.
You’ll find us at rocketagency.com.au/contact or 1300 059 620.
All the best,
We’re an award-winning agency of 50+ digital marketing specialists. Our sole focus is on fuelling the business growth of our clients through digital channels including PPC, SEO and Paid Social. We’ve been around long enough to know that success requires the best people, and for those people to bring to the table a blend of technical brilliance, marketing smarts and business savvy. Add to that our radical commitment to our clients and their results and you have Rocket.
James is co-founder of multi-award-winning Australian digital marketing agency Rocket, keynote speaker, host of Apple’s #1 Marketing Podcast, Smarter Marketer, and co-author of the 2019 Amazon Australia’s #1 best-selling marketing book of the same name. He was also a finalist in 2019 and 2020 B&T Marketer of the Year.
James’ 15-year marketing career working with more than 500 in-house marketing teams inspired the 2019 release of Smarter Marketer. It has been endorsed by marketers at some of Australia’s leading brands, including Hubspot and KPMG.
In 2022, James launched the Smarter Marketer podcast, the definitive podcast for Australian marketers. Released fortnightly, James sits down with local experts and global authorities to discuss how Australian marketers can become more successful in their careers.