When times are tough, and your revenue is taking a hit, every business will look to save money wherever it can by making efficiencies. There is no easy method to decide what to spend to save, but many business costs are fixed and can’t be changed quickly. The question remains, how do you know which areas will give you the greatest efficiencies?
Marketing often gets a spending cut during a recession, as it’s one of the quickest ways to save and is regularly not seen as a direct operating cost. Marketing spend is your customer acquisition, so cutting spend has a big effect on your business. A recession can be a great time to analyse your current efforts and see what you can do better as customer buying habits change. For example, just on paid social, there are many efficiencies you can make to push your ads further, bringing in more revenue for your spending. Efficiencies can be made on all marketing channels, a recession is the ideal time to increase effiencies within your marketing to make you exisiting budget go further. As your business changes with the world around it, there’s no better time to convince your customers you are on their side.
So, here are 5 reasons why you should continue with your marketing spend during a recession
1. Experimenting with your marketing campaigns is best done when customer behaviour is unpredictable
During a recession, buyer habits become unpredictable as people decide what is important depending on their budget, and what your offering is. Your business will automatically become more or less attractive as a result of factors outside of your control. What’s important is to make sure that you adapt to your new position, and reach your customers with relevant methods and messaging to keep your company in their mind.
Email marketing product Mailchimp saw huge growth during the 2008 financial crash recession, and grew its user base from 85,000 to 450,000 in just 1 year, as companies looked to reach audiences in a new and cost-effective way. This growth demonstrates how companies were having success reaching their audience in a new, more cost-effective way than they had traditionally been using.
2. Holding back marketing spend, will further hold back your flow of customers
Every business needs to keep up, as the world is always changing, so are the channels in which we operate. Social is growing, search is growing, out-of-home advertising is declining, as is print circulation. It’s important to always keep innovating and changing your strategy, so you don’t get caught in the past, as if you stop moving, time will not stop with you.
We can learn about the lack of investment in innovation, with examples of household names we lost during the last recession, such as Blockbuster and Woolworths, who were decorated as one of the most successful retailers in the 90s. These companies used the same strategy in 2007 as they did before the financial crash, which meant they weren’t in a position to weather the storm of a recession. Their customer flow was already slowing due to lack of investment.
What’s changing in digital marketing currently, is the emphasis on the consideration phase of the buyer journey, and one main take away for your businesses, is to invest in this, and the messy middle. Companies who only invest in the top of the funnel and bottom of the funnel, will be ill-prepared for a recession. It’s more important than ever to show up, now is the time to invest and be in place to steal market share, beating your competition ahead of the upcoming uncertainty.
3. A recession can be the best time to expand into new markets and products while demand is shifting and buyer habits realign
Some companies have made a huge investment in marketing spending, as their business plan during a recession is to conquer another market and diversify their product offering. This allows them to take advantage of different economies and diversify their appeal. Lego bought on several new territories and introduced the brand to a much older demographic during the 2008 recession, investing heavily.
If you can see times are going to get tough, then look as far as you can to invest in diversification to protect your business. It is never wise to have all your eggs in one basket, be that products, strategies or marketing channels. Embryo offers a range of services, so don’t rely on just one to keep your business operating successfully. Adding multiple channels spreads the marketing risk and allows you to switch strategies quickly, should you need to.
4. If you’re getting creative with your offering, then you need people to know what you’re doing to stay on their side
If you don’t offer value to your customers during a recession, you need to change up what you do to be attractive. When making this change, you must make sure people know about it by running awareness campaigns. Embryo ran a fantastic awareness campaign using Digital PR for I Saw It First, which generated brilliant results and brought this brand to market. These campaigns were very successful in educating people about what the brand did. Social media is also an effective channel for top-of-the-funnel advertising, which you will need to use, if your proposition changes to cater to a new segment during a recession.
5. Adapting is better than fading
It’s the dream that business will always come, and the magic formula you’ve created will work forever. One of the biggest things that can impact your strategy is the economic landscape, and that’s why it’s so important to keep adding to that magic and investing the profits you make when times are good, as well as when they are tough. There are so many marketing channels and strategies to try, Embryo offers many of them including PPC, SEO and Digital PR, but what’s important is to keep spending on your marketing as you expand to attract enough people to interact with you, even if the economy makes this more challenging.