Understanding consumption patterns and fine-tuning a top-notch game plan is critical for designing a strong marketing game plan, says our guest author.
The impact of recession on marketing
Marketing is a crucial function for any business, especially during recession. Marketing can help to attract new customers, retain existing ones, and increase brand loyalty and reputation. However, making the most of marketing during a recession, requires adjustments and adaptations to changing consumer behaviour and preferences.
Challenges of marketing during a recession
Recessions adversely impact businesses, often sparking uncertainty and fear among stakeholders. Business leaders aim at quick returns and high-cost savings. And, because marketing is typically viewed as a cost centre, instead of a key revenue generator, it is often perceived as a liability, a top target for budget cuts.
As organisations gear up for pre-emptive cut costs by diverting spending away from marketing during a recession, we believe that such indiscriminate cost-cutting is a short-sighted strategy, failing to tap into the colossal returns that set businesses up for greater success in the years ahead.
Understanding consumption patterns and fine-tuning a top-notch game plan is critical for designing a strong marketing game plan. Some of the key challenges of marketing during an economic downturn are as follows:
Rethinking a smart spending plan to ensure less ad waste and maximise marketing efficiency.
Analyse company products and services to determine which have great survival prospects and which are likely to die during or post-recession.
Closely tracking and staying abreast with consumer behaviour and sentiments during a recession.
Focussing on the customer experience that hinges on good quality and great returns on investments (for customers).
Auditing marketing channels to concentrate spending on those that deliver great returns.
Opportunities for businesses during recession
In addition to the challenges, far greater opportunities exist for businesses during a recession. Here’s how marketers can capitalise on that:
Higher chances of increasing marketing share as competition plummets.
Better search rankings as competition cuts down on digital marketing spend; stepping up SEO and leveraging social media during this time can drive more website traffic and increase brand visibility and awareness.
Strengthen relationships with existing customers with discounts, incentives like loyalty programs and regular reminders of company offerings so that the customers can spend when the recession eases out.
Consistent marketing spending during a recession yields great dividends when the recession subsides, as recessions aren’t forever. You’d be surprised to know that some of the world’s greatest brands today, like WhatsApp, Slack and Microsoft, were founded during an economic downturn.
It is rightly said that recessions make the best marketers. As you prepare a recession-proof marketing strategy, here are a few pointers for marketing leaders to step up and help your organisation power through the hard-hit economic environment:
Lead by example and motivate your team
As a marketing leader, you must set the tone and direction for your company during a recession. You need to communicate clearly and honestly with your team and stakeholders about the challenges and opportunities ahead.
You need to show confidence and optimism, but also realism and flexibility. You need to motivate your team by recognising their efforts, providing feedback, offering training or development opportunities, or sharing the benefits of success.
Hyper-focus your recession marketing plan
A recession is not the time to be vague or generic in your marketing plan. You need a clear and specific understanding of your target market, unique selling proposition (USP), goals and objectives, and strategies and tactics. You need to segment your market into smaller and more homogeneous groups based on their demographics, psychographics, behaviour or needs, and tailor your marketing messages and offers accordingly.
You must define and communicate your USP clearly and consistently across all your marketing channels. You need to set SMART (specific, measurable, achievable, relevant and time-bound) goals and objectives, and track and evaluate your progress and results.
Market to existing customers
It is more cost-effective and easier to market to existing customers than to acquire new ones. Existing customers already know and trust your brand, and are more likely to buy from you again or refer you to others.
You can market to existing customers by providing them exceptional customer service, offering them loyalty programs or rewards, sending them personalised emails or newsletters, asking them for feedback or testimonials, or creating referral programs.
Update your messaging based on changes in consumer spending
Consumers tend to be more cautious and selective about their spending during a recession. They look for value, quality, reliability and trustworthiness in the products or services they buy. They also seek emotional reassurance and support from the brands they choose.
Therefore, you must update your messaging to reflect these changes and appeal to your target audience’s needs and pain points. You can use words like “save”, “guarantee”, “free”, “proven”, “safe”, etc., to emphasise the benefits and value proposition of your offer.
Diversify your client base and product offerings
This can help you reduce your dependence on a single market or industry that a recession may hit hard. For example, you can target clients in essential sectors such as healthcare, education or utilities, or offer products or services that can help people save money or improve their well-being.
Review your channel and campaign performance
You need to measure and analyse the effectiveness of your marketing channels and campaigns and identify which ones generate the most return on investment (ROI). You can use tools like Google Analytics, Facebook Insights or HubSpot to track key performance indicators (KPIs) such as traffic, conversions, leads, sales, etc. You can then allocate your budget and resources to the most profitable channels and campaigns and cut or optimise the underperforming.
Invest in educational content for extended buying cycles
A recession can also affect the buying cycle of consumers, making it longer and more complex. Consumers research, compare options and seek more information before purchasing. Therefore, you must invest in creating and distributing educational content to help them in their buyer’s journey.
You can create content such as blog posts, ebooks, white papers, webinars, podcasts, videos, etc., that can provide valuable information, answer common questions, address objections or showcase case studies or success stories. You can also use content marketing to establish your authority, credibility and thought leadership in your industry.
(Our guest author is Kiran Veigas, general manager & head – corporate marketing & communications, Happiest Minds Technologies.)