Marketing in Recession: Tips to Survive and Thrive in Tough Times
In an uncertain economy, businesses have to be smart about their spending. Marketing budgets are often one of the first areas to be cut when times are tough. However, eliminating or reducing your digital marketing efforts can be a mistake.
In the 1990-91 recession, McDonald’s decision to reduce its advertising budget resulted in sales dropping by 28% and gave their market share to Pizza Hut and Taco Bell to increase their sales by 61% and 40%, respectively.
Eliminating or reducing your digital marketing efforts can be a mistake. Instead, it would help if you focused on making your marketing more efficient and cost-effective. Here are a few simple ways to do it:
Recession-Proof Digital Marketing
- Go Lean: Instead of allocating money for extensive, splashy campaigns, go for smaller initiatives that can be executed quickly and cheaply. Focus on content marketing, email marketing, search engine optimization, and other cost-effective strategies that will keep your brand top of mind without breaking the bank.
- Focus on ROI: When money is tight, marketing campaigns that can show a clear return on investment are more likely to get funding. Be sure to track your metrics closely and demonstrate how your efforts drive sales and leads.
- Keep your branding strong and consistent: Keeping your branding strong and consistent in a recession is more important than ever. Your brand sets you apart from your competitors and helps you build trust with your customers. Make sure your branding is visible and consistent across your digital channels, from your website to your social media profiles.
- Focus on quality over quantity: When budgets are tight, it’s tempting to cut corners and go for the cheapest option available. However, this can be a mistake in digital marketing. In a recession, focusing on quality over quantity is more important than ever.
- Write your own content: You know your business better than anyone else. So writing your content by yourself allows you to talk to your customer directly through the website and minimises your spending on content writing.
- Get creative with your content: If you can’t afford to produce new content, repurpose existing content in new and exciting ways. For example, turn a blog post into a video or infographic. Many free tools available today help you create short videos and inforgraphic and remarket your content again.
- Be smart about your paid advertising: Don’t waste money on ads that aren’t reaching your target audience. Instead, focus on targeted campaigns likely to generate leads and sales. Keep on monitoring your ads and updating them as and when needed.
- Spend on SEO: SEO is one of the most efficient, lucrative, and cost-effective marketing today, and it’s still a viable strategy to help your business develop (or at least stay afloat) even during economic downturns.
- Analyse your data: Use data from your website and social media platforms to track what’s working and what isn’t. Doing so will help you focus your efforts on the strategies that are giving you the best results.
- Double down on existing customers: It costs less to keep existing customers than to acquire new ones, so now is the time to focus on customer retention. Offer loyalty discounts, improve your customer service, and make it easy for customers to do business with you.
By following these tips, you can make sure that your digital marketing strategy is ready for anything the economy throws your way.
Identify your core marketing goals
During recessions, we have seen companies cutting their marketing costs as their sales and profit drop. Its true customers tighten their budget and shop less, but this does not mean they don’t buy anything. They narrow their needs and spend on only items which matter most to them. In the same way, marketing expenditures in areas from communications to research are often slashed across the board—but such indiscriminate cost cutting is a mistake.
Small and medium-sized enterprises do not have to cease marketing during a recession since they must continue operating. And to be in business, one had to identify their marketing goals and execute their plan to serve their customers.
Consider the customer persona and how customers are reacting in the current context when developing any marketing strategy. Customers can be divided into 4 types of groups:
- Slam on the brakes: People in this group feel most vulnerable and most impacted financially. They reduce spending by eliminating, postponing, decreasing or substituting purchases. Studies also show that higher-income consumers are also susceptible to this. After all, not everyone who falls under the lower-income category has a stable income, and they can be just as anxious as those with higher incomes.
- Pained but patient: Consumers are resilient and will continue to spend what they can afford in the near future. They’re not too optimistic about future economic prospects, but they’ll keep an eye on the situation while spending what they can afford today.
- Comfortably well-off Consumers: Consumers feel secure about their ability to ride out current and future economic bumps, and they consume at near-pre recession levels, though they tend to be a little more selective about their purchases. Primarily this segment applies to people in the top 5% income bracket. It is also important to consider those who are less wealthy but feel confident about the stability of their finances—people like retirees or investors who got out of the market early, for example. They may not have a lot of money saved for emergencies, but at least they’re feeling financially stable.
- Live-for-today group: Consumers are moving on with their lives and aren’t concerned about how far into the future they’ll save. They simply adjust the length of time until they usually make big purchases when times get tough.
Based on the customer groups mentioned above, develop a new group to market. Depending on the current customer category you use to target, find your chance for a new group and align your marketing strategy to retain current clients and attract new ones. As Buffet said,, “be greedy when others are fearful” those who do not cut their marketing budget in recession, when most resist spending on marketing always succeed. Many firms, for example Airbnb and Uber, have emerged during the recession and are now well-known brands.
Prioritise your spending
In any recession, businesses face tough choices. Do they spend less on marketing and weather the storm, or do they continue to invest in marketing and risk not having enough cash to sustain operations? The answer, of course, is different for every business.
Any marketing professional will tell you that it’s important to be strategic about your spending during a recession. With budgets being cut left and right, you need to ensure that your money is going to the places with the most impact. So, how do you prioritise your spending during a marketing recession?
- Focus on your core products and services. As businesses have a limited budgets, focus only on your core products and services. Don’t add any marketing budget to products which are not your core products.
- Take a close look at your target audience. Who are they, and what do they want? Once you have a good understanding of who your audience is, you can start to allocate your resources accordingly. For example, if your target audience is young adults, you might want to focus your spending on digital channels like social media and online advertising. On the other hand, if your target audience is older adults, you might want to focus on more traditional channels like TV and radio.
- Consider shifting your focus from mass media to more targeted channels like online advertising or direct mail.
- Businesses should remember that even in a recession, customers still need and want products and services; businesses that can provide them with what they need at a fair price will be best positioned to succeed.
- Track your results closely. During a recession, it’s more important than ever to show a return on investment for your marketing spend. Keep track of how each of your campaigns performs and adjust your strategy accordingly. This will help you ensure that your money is going to the places that are actually generating results.
- Don’t be afraid to get creative. A recession is a perfect time to get out of your comfort zone and be creative and visible to your audience.
By carefully prioritising your spending, you can ensure that your marketing budget continues to deliver results even during tough economic times.
Make the Most of Free or Low-Cost Tools
Any small or large business needs a digital marketing strategy these days. Digital marketing is a complex and ever-changing field, making it difficult to know where to start. Creating and implementing an effective digital marketing plan can be costly. Numerous tools available can help businesses automate their marketing tasks and save time and money. Every business can take advantage of three free or low-cost digital marketing tools mentioned below:
- Google Analytics: Google Analytics is a powerful tool that provides valuable insights into website traffic and user behaviour. By understanding how users interact with your website, you can make changes that improve the overall user experience and increase conversion rates. Best of all, Google Analytics is free to use.
- Hootsuite: Hootsuite is an excellent tool for managing social media accounts. With Hootsuite, you can schedule posts, track who is talking about your brand, and measure your social media ROI. Hootsuite offers a free plan for small businesses.
- MailChimp: MailChimp is an excellent tool for email marketing. With MailChimp, you can create beautiful email newsletters, automate your email marketing campaigns, and track the results.
Outsource your digital marketing
Outsourcing your digital marketing can be a great way to save time and money during a recession. By outsourcing your digital marketing, you can focus on what you do best and leave the digital marketing tasks to a professional. This can be a cost-effective solution for small and medium businesses that don’t have the resources to hire in-house staff.
The recession has hit businesses of all sizes, but those who are able to adapt and change their marketing strategies will come out on top. At Chetaru, we have been helping agencies to do just that – survive and thrive in tough times. If you’re looking for help outsourcing your digital marketing work, get in touch with us today. We have a team of experienced professionals who can help you achieve your marketing goals, whatever they may be.