The facts and figures are in, and the signs seem to point to the inevitable: an upcoming economic downturn. It’s an uncomfortable topic that many like to pretend isn’t relevant until it’s too late. And while entering into a period of economic recession can be stressful for a business, with the right preparation and strategy, a recession can provide an avenue for growth in market share and search engine dominance for your company.
IS YOUR COMPANY’S MARKETING STRATEGY READY FOR THE NEXT RECESSION?
For the first time since the 2008 Great Recession, marketers may see significant budget cuts in the next few years. But with the right digital marketing strategy, your company’s marketing efforts don’t have to suffer for the sake of the bottom line.
For our most recent Bell Media webinar, our Founder and CEO Scott Bell joined with our Director of Content Marketing Phyllis Rush to address the topic of marketing during a recession, and ultimately, Turning an Economic Downturn into the Digital Opportunity of a Lifetime.
What is a recession?
A recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in Gross Domestic Product (GDP) in two successive quarters.
Even if you aren’t actively monitoring America’s economics, you will feel the effects of a reduction in the GDP. Recessions often manifest through a change in consumer habits of consumption and spending that then leads to businesses making financial cuts and other financial decisions to maintain the bottom line.
How do consumer habits change?
During a recession, consumers shift from categorizing products and services based on their purpose to dividing items by their necessity. Regardless of the demographics of your target market, all consumers will prioritize products and services by sorting them into the following categories:
- Essentials are necessary, must-have items for everyday living. In the minds of the consumer, these items are needed for survival or well-being. (HVAC, groceries, household services)
- Treats are “little” indulgences that are justifiable to the consumer. Consumers use these products and services as a way to treat themselves and get away from life’s challenges. (Eating out at a restaurant, Botox)
- Postponables are needed or wanted items that consumers are willing to postpone purchasing. (New car, electronics)
- Expendables are what consumers perceive as unnecessary items to purchase within a specific time frame. (Extravagant vacation, flatscreen TV)
TAKING ADVANTAGE OF A RECESSION
When a recession hits, marketing is usually one of the first budgets that businesses are tempted to cut. And it’s true, cutting the budget for marketing during a recession is a reaction many companies arbitrarily make. While this may provide short-term savings, this choice proves to be a poor financial decision in the long run.
Because your marketing efforts directly correlate with your brand awareness and consumer trust and loyalty, digital marketing during a recession often proves highly useful. Additionally, if your competitors reduce marketing efforts during the downturn, you’ll see an even higher long-term return on your marketing investments.
WHAT CAN YOU DO TO PREPARE?
- Identify your owned assets.
Marketing content that your company creates and has control over is an owned asset. Owned assets include your website, blogs, email lists, and more. Your owned media is critically important for your marketing strategy because through pairing your thought leadership with your SEO tactics into these assets, you bring in leads and convert your prospects. Therefore, taking stock of the shape of your owned assets before a recession hits can help you understand the state of your brand.
- Pinpoint your promoters.
During a recession, it’s imperative to start with your loyal, existing customer base. Who are the people who consistently engage with your brand, send you leads, and cheerlead your company both online and offline? Identify those customers, establish a relationship with them, and offer some value to them for continuing their promoting efforts. Building up your current and potential promoters before a hard time hits will strengthen your brand relationship, despite the economy.
- Make reviews a priority.
According to Qualtrics, 93% of consumers are influenced to make a purchase based on the online reviews. Encourage customers to leave reviews and bring in leads to do business with you by way of testimonials of happy, satisfied customers.
- Increase your branded content.
Your company’s content marketing sets you apart from the crowd. You can utilize your videos, blogs and articles, white papers, and special reports to display your unique thought leadership, relatability to your target market, and competitive advantages in the market. By posting content that’s relevant to your audience, you make a path for connection, trust, and loyalty.
- Display your value proposition.
It’s important to be up-front about how and what value opportunities your company promises to deliver for your customers. While a recession isn’t the time to rethink your entire business model, it is an excellent time to highlight what makes your company unique and valuable to your customers. If you offer financing, have positive reviews, or authored an impactful case study, showcase those items prominently on your website to attract customers.
ACTION STEPS DURING A RECESSION
- Leverage your email list.
Position your brand to improve market share by connecting with your most loyal customers through an email newsletter. Nurturing your customers throughout the recession with your branded materials will keep your product in the minds of your target market.
- Build and nurture the marketing funnel.
The marketing funnel starts broad with awareness, then moves to interest and evaluation, and finally to commitment and sales. Investing in tactics such as remarketing and inbound lead ad campaigns that build a robust funnel will keep customers in the sales cycle and on the pathway to purchase.
- Maximize your marketing efforts with better targeting.
When other businesses reduce their marketing efforts, you get more targeting opportunities. Take advantage of these opportunities, and you’ll get more mileage of paid channels.
- Stay consistent with your SEO efforts.
Reap the benefits of stronger rankings during and after a recession by investing in your organic rankings when your competition isn’t. Because of the recession, moving up to page one of Google search may be easier than you might think.
Overall, the challenge of periods of recession lies in determining responses to consumer behavior changes. This upcoming recession isn’t the first recession, and it certainly won’t be the last. While recessions can cause financial strain and stress, they are often the launching pad for growth for local companies.
These are the four major takeaways from the idea of marketing during an economic downturn:
- Understand your media metrics to heighten confidence in your marketing strategy.
- Start planning now.
- Be precise and tactical with your marketing efforts.
- Take advantage of the fact that your competition is pulling back and lean into your company-owned assets.
“The biggest changes to market share take place during a recession.”
Bain and Company – The Power of Consumer Loyalty during a Downturn