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What a Recession Means for Your Marketing Strategy

Marketing

What a Recession Means for Your Marketing Strategy

Updated: July 20th, 2020

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Before COVID-19 disrupted the entire world, experts were already predicting a recession was on the horizon for either 2020 or 2021. The coronavirus pandemic might not have been the cause of the recession, but it certainly was a catalyst. Now, the economic downturn in the US has been officially declared a recession, and businesses big and small are making important decisions to stay afloat.

Often, when businesses see a decline in sales demand, they immediately slash their marketing expenses to save capital. Their survival strategy is to plug the cash leaks and weather the storm—this is a recipe for disaster!

History teaches us time and time (and time) again that a recession is the time to boost your marketing spend, not cut it. As the popular adage says, “When times are good you should advertise. When times are bad, you must advertise.”

Managing a business during good times is hard—managing it during a recession is downright arduous. Your pre-recession marketing strategy isn’t going to work during a business crisis, but that doesn’t mean you’re down and out. Now’s the time to hit the drawing boards, grind out the virtual brainstorm sessions, and whip up a recession-optimized marketing strategy.

You don’t have to survive the recession—your business can thrive. It’ll just take a well-thought-out, intentional strategy that takes a few prime considerations into account. When drafting your new recession marketing strategy, here are the top factors you should consider.

Market share is up for grabs

Inevitably, some of your competitors are going to cut the marketing budget to outlast the recession. This is your chance to seize a more significant piece of the market share.

The Excess Share of Voice Rule (ESOV) says that if a business spends more on advertising than its competitors, the business will grow proportionally. When your competitors’ spend is down, it’s the perfect opportunity to implement a recession marketing strategy that increases your ad spend and dominates the market.

As advertising competition falls, so will the prices. You’ll find it’s cheaper to earn your social media, display, and PPC ad clicks. Each customer will yield a higher ROI, granting you greater capital to invest back into the marketing funnel.

A recession marketing strategy adapts to changes in consumer habits

A recession doesn’t mean consumers around the world crawl under a rock and disappear until things are bright and cheery again. Your consumers’ habits will change—but they won’t die.

Your recession marketing strategy will need to change to meet your consumers’ new habits. For example, if you’ve been investing heavily in outdoor advertising, you may want to reallocate your budget to focus more on digital marketing—where people are spending more of their time lately. 

Building a marketing strategy during a recession requires doing some new research to learn about your customer audience. Do they have discretionary income to spend? Are they more or less impacted by COVID-19 or the recession? Is your product or service a nice-to-have or a need-to-have in this new economy?

Answers to these questions will shape more than just your marketing strategy. They’ll also inform your product strategy and even your business’s overall direction and vision.

COVID-19-Related content is on the decline

Businesses big and small have been pushing COVID-19 content for months now. But, as we slip out of this pandemic into a recession, you’ll want to adjust your content strategy.

As we slowly return to normal life, most industries are moving away from COVID-19-related content because consumers are pre-occupied with other concerns. COVID-19 content fatigue is setting in as we roll into summer. Though it may spark in the future with a resurgence of the virus, expect consumers to be searching and reading more varied topics in the meantime.

Not all companies have slowed their COVID-19 content production. So, this is prime time for you to get ahead in your marketing strategy by plannine recession-oriented content. Jump to the top of the search engines and social media feeds by providing the most relevant content to your audiences.

Collect and analyze data to inform a recession marketing strategy

There’s no guarantee what worked before is going to work now. So, before finalizing a marketing strategy during a recession, begin collecting and analyzing all your available data. This includes Google Analytics, ESP (email service provider) statistics, Adwords results, and social media analytics. This changing data will reveal key insights to inform important business decisions.

Current data might uncover that your social media campaigns are your best-performing channels.So, you might want to boost your investment there. Or you may find that your PPC ads are yielding a lower ROI. This suggests you should put those campaigns on pause or readjust them significantly.

Foster your existing customer base

Finding new customers is always more expensive than nurturing your current relationships. The recession will be the perfect opportunity for you to solidify your existing relationships and create lifelong customers.

Create a recession marketing strategy that emphasizes doing everything you can to keep your customers loyal and happy:

  • Provide top notch customer service. Go above and beyond to make every customer feel special, valued, and heard. 
  • Respond to feedback and reviews promptly—both negative and positive.
  • Offer extensive discounts and promotions. Times are hard for everyone—your customers will appreciate you lending a helping hand and will reward you with their wallets and word of mouth.

Adjust your marketing strategy to thrive during a recession

Changing your marketing strategy is going to require some tough decision-making. There’s a lot of ambiguity at the moment, and it’s hard to know the right answers.

However, the companies who let fear slow their adaptations will likely burn cash and business opportunities. When brainstorming a marketing strategy during a recession, do your research, consult with your team members, and don’t be afraid to pivot first.

Your business doesn’t have to survive this recession—it can thrive! Start making plans and adjusting your marketing strategy now so you can act— rather than react—when the brunt of the recession hits.

If your business needs working capital to make your new recession marketing strategy a reality, consider getting an SBA 7(a) loan. Our specialists can help you get one of these government-backed loans with amounts ranging from $20k to $5 million. Learn more about our SBA 7(a) loans, or get started with your application now.

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