It’s no longer a question of if, but when. A recession is on the horizon. According to one analysis, the likelihood of an economic downturn is at a staggering 98%.
To prepare for the upcoming recession, many businesses are cutting down their marketing costs. Over half of businesses across the globe expect to reduce marketing budgets over the next 12 months.
In the short term, this strategy might seem to make sense. After all, when consumer spending goes down, you don’t want your marketing efforts to go to waste. But if you want your business to survive, let alone thrive, in this uncertain economy, you must be prepared to put your marketing budget to good use and promote customer loyalty.
In fact, the right marketing strategy can do more than just keep your head above water. It can yield powerful results for innovation and growth. Let’s explore the top reasons why you should still be marketing during a recession.
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A Looming 2023 Recession
Across the board, most economists agree that a recession of some degree is coming. But what exactly does that mean, and what does it look like for businesses?
A recession is a period of economic downturn that affects a nation’s economy for at least six months. The best way to understand recessions is to consider the gross domestic product (GDP), which is the combined value of goods and services produced by an economy. When everything is running smoothly, the GDP should grow over time. When a recession kicks in, however, the GDP is negative. That means the value of goods and services goes down for a prolonged period of time.
Many recessions in the past have come as a surprise. That’s not the case for 2023. Experts have been warning about an impending economic downturn far in advance. One survey found that economists predicted a 70% chance of a recession in the next year.
It’s not clear yet what that recession might look like. There are conflicting predictions about how severe it could be and how long it might last, but most agree that at least a mild recession will start in the first half of 2023.
While recessions are a normal part of the economic cycle, they can be devastating for businesses and consumers alike. People stop spending, which impacts the bottom line for many businesses.
When there’s a recession around the corner, many business owners start looking for ways to minimize the damage as much as possible. That can include protecting revenue, lowering operating costs, cutting marketing costs, and reevaluating staffing. All of this can be a good thing. However, there’s one area where making cuts could do more harm than good: marketing.
The Importance of Marketing During a Recession
When a recession comes around, consumers tend to quickly reduce spending. It’s not uncommon for businesses to follow suit. Anticipating hard times on the horizon, businesses may cut back on costs deemed “unnecessary.” In many cases, this can mean that marketing budgets are on the chopping block.
But evidence shows that this doesn’t yield the best results.
Let’s take a look at 2008 when the U.S. was struck by a severe financial crisis. During this time, 60% of the brands that stopped TV marketing investments saw brand use decrease by 24% and brand image decrease by 28%.
The economic downturn in the 1980s played out the same way. Businesses that chose to maintain or improve their marketing efforts had higher sales after the economy recovered. The companies that chose to double down on advertising had more than 250% higher sales than those that stopped.
Studies show using the right marketing strategies during economic slowdowns can help companies capitalize on the recession, setting themselves up for a better long-term ROI. The businesses that choose to push forward, maintain or increase marketing spend, and innovate their strategies can come out even stronger on the other side when the economy recovers, while the businesses that slash their marketing teams and budgets could be left behind in the aftermath.
Recessions are only temporary. It’s true that customer spending habits go down during a recession, but people are still exposed to advertisements and marketing campaigns every day. When things go back to normal, brand recognition and customer loyalty will help drive those purchasing decisions.
It’s also a question of competition. Many companies will pull back on their marketing campaigns, giving you the chance to stand out from the crowd. When your competition is out of the way, it’s easier than ever to reach your target audience and build a loyal customer base.
Top Tips for Marketing During a Recession
Marketing during a recession isn’t just an option, it’s a necessity. That said, you still need to know how to market during a recession. It takes the right strategies to make the most of the opportunities ahead of you and to avoid making mistakes that could put you behind your competition.
With all of this in mind, how can you navigate marketing during a recession? Here are the top tactics for setting your business up for success when times are tough.
Focus on Content Marketing
Investing in marketing during a recession is important. But that doesn’t mean you shouldn’t be careful about how you spend. The right recession marketing strategy is a thoughtful one, so you should think carefully about which marketing channels to focus on.
That’s where content marketing can help. Content marketing is a strategy focused on creating content, like blog posts, videos, podcasts, and other media. The goal is to attract your ideal customer by providing relevant, valuable content that speaks to their needs. When it’s done the right way, content marketing can improve brand awareness, help you build a loyal following, and drive sales.
What makes content marketing so effective during a recession? It’s affordable but still effective. Compared to other forms of marketing, SEO-driven content marketing is a relatively low-cost way to make a significant impact.
Here’s what the stats say about content marketing:
- Marketers that prioritize content marketing and blogging are 13 times more likely to drive ROI.
- Businesses with blogs get 67% more leads.
- 72% of B2B businesses say that content marketing increases engagement and leads.
Use Value-Based Messaging
During difficult economic times, people are seeking value more than ever. They want brands to understand them — their wants, their needs, and their struggles.
Value-based messaging is the best way to forge a deeper, more meaningful connection with your audience during a recession. When you emphasize value in your campaigns, you create a long-term relationship built on trust.
When people come across your website or blog, they should be able to reap important information right away. Don’t focus on the pitch or the sales message. Instead, think about how you can address their pain points and prove you’re the best choice to meet their needs. Doing this will help you gain loyal customers that will do repeat business.
Target Existing Customers
Instead of fighting for attention in a challenging economic landscape, why not focus on what’s already working? It can be much easier to upsell to your current customers. They already know the kind of value you deliver with your products or services, so now it’s your job to keep them engaged.
Focus on improving brand loyalty and enticing them to come back again and again — during and after the recession. Use part of your current marketing budget to check on your existing customers through email newsletters, text messages, and social media posts. Let them know how much you appreciate them during this hard time, and offer some appreciation in return, like an exclusive discount or a special offer.
Devise a Content Strategy
When times are tough, you can’t always count on the same strategies to give you the results you’re looking for. The economy has changed, which means consumers aren’t behaving in the same ways anymore.
You need to evaluate and update your strategy to stay on top of the quickly evolving marketing landscape. Think about how your target audience might be experiencing the recession. How can you reach them during this time? What challenges are they facing?
Your content strategy will depend on your unique goals and target audience. For example, you could double down on your blog posts, whether you’re posting how-tos or sharing important case studies, or you could start a YouTube channel to engage your audience with long-form video content.
Keep Consistent Branding
Trust is the foundation of your relationship with customers during the recession. When things get unstable, people want something they can rely on.
That’s why you need to focus on consistency. Keep a strong, recognizable image that will stick in the minds of both old and new customers. Even if you’re not making as many sales during the recession, a consistent brand image could pay off later. The more people remember and recognize your branding, the more likely they are to turn to your business when they’re in a stable place financially and ready to make a purchase.
If you have any changes in mind, like rebranding, save those until after the economy rebounds. Making big moves during an uncertain economic moment won’t help you attract new customers; It’s more likely to confuse or lose your loyal audience.
Keep Track of Competitors
It’s easy to get wrapped up in your own marketing strategy when a recession is on the horizon. But don’t forget to pay attention to other businesses in your industry.
To make the biggest impact, you need to know what your competitors are doing and be prepared to outdo them. Many of your competitors will likely panic about the oncoming recession and slash their marketing budgets. This can be a great opportunity for you to swoop in, driving your marketing efforts to reach the customers they’re failing to engage.
However, not all of your competitors will make this mistake. Some of them will also be thinking of ways to get ahead. They may even be using the same strategies you are to capitalize on the marketing opportunities the recession can provide.
Even if your competitors are also pushing forward with marketing during the pandemic, you can still find weaknesses in their strategies. They may slow down on social media marketing, for example, or they could fail to adjust their content marketing strategies to account for the hard economic times. Think about how you can fill those gaps with quality content to strengthen your credibility and take market share from your competition.
Outsource Marketing To An Agency
While you could take on a recession alone, outsourcing can help you make the most of this opportunity. In fact, digital marketing agencies are in a unique position to help businesses get through a recession unscathed, if not better than before.
From training to salary costs, the costs of managing an in-house marketing team can add up. When the threat of a recession puts strain on your resources, this isn’t always something you can afford.
With a marketing agency, you can build an outsourced team of all the experts you need, including website builders, SEO experts, social media coordinators, and marketing strategy specialists — without the high costs of a large in-house staff. And it gives you more flexibility to scale up or down, depending on your needs.
Working with an agency can also help you make the most of your marketing investment. With the right strategies to drive results, you can ensure revenue keeps flowing even when times get tough. As you adjust your campaign along the way, you’ll also get access to the analytics and expert recommendations to help you optimize performance.
Find Trusted Digital Marketing Agencies with Credo
The thought of a recession can bring fear and uncertainty, but don’t let that influence your decisions. Cutting your marketing budget can harm you more in the long run.
When you continue to focus on marketing, you’re building a foundation for success in the post-recession future. If you’re bold enough to be one of the few people in the room making moves, you can emerge from the recession stronger than ever before. There’s never been a better time to work with marketing professionals to prepare for the upcoming recession. Learn more about how we at Credo can help you find a trusted digital marketing agency and get started with us today.