When times get tough, it can be easy to fall into the trap of cutting back on marketing budgets. But we’re going to show you how to avoid this trap and why marketing in a recession is essential.
Let’s not beat around the bush, times are tough and could get worse before they get better. Wherever you look the harbingers of doom are sounding. Politicians are warning of a rocky road ahead with hard decisions to be made, the markets seem to be only one step away from meltdown, and everyone is feeling the squeeze.
Although we’re not officially in a recession, the cost of living crisis is being felt across the board and consumers are tightening the purse strings. They’re wary of where to spend their money and we’re living in an extremely competitive environment for brands across all industries.
So what do you do? Batten down the hatches and wait for the storm to pass? Or seize the initiative and double-down on being there for your consumers and building relationships with them even when the going gets rough?
Luckily, we don’t have to cast our minds back too far to find a similar situation when we were all faced with these choices. We all felt the effects of the pandemic. While it brought with it a unique set of circumstances – it wasn’t too dissimilar to what businesses go through during a recession.
And what the pandemic taught us was the businesses that hid and went into their shells were the businesses that missed opportunities, fell behind, and lost customers.
Whether it was restaurants diversifying to offer takeaway menus, retailers embracing click-and-collect models, or estate agents conducting virtual tours, there are countless stories of businesses turning impending disaster into glorious success.
The stats back this up. A study from McGraw Hill in the US found that companies who continued to advertise through the recession in the ‘80s saw 256% higher sales than their counterparts post-recession. Those who chose not to advertise during the economic slump, saw a virtually 0% market share increase and a rise in sales of only 18% once the economy regained traction.
So, rather than slashing your marketing budget and standing still (with a risk of getting left behind), here’s what you should do instead:
- Prioritise loyalty and retention
- Add value and be a force for good
- Re-evaluate your plan and strategy
- Spend your budget more effectively
- Consider the case for outsourcing
1. Prioritise loyalty and retention
It’s much easier to keep existing customers (and get repeat business from them) than it is to find new ones – especially in a recession. 61% of SMBs report that over half of their revenue comes from repeat customers, rather than new business. This means that prioritising loyalty, retention, and lifecycle marketing are a must.
This is where tailored, personalised communication with your customers comes into its own. Make your customers feel special and valued. The best brands know how to tap into our emotions, they know how to make us love them and, in doing so, they ensure we return to buy from them again and again.
By creating exclusivity and a sense of community in your email marketing, you’ll make your subscribers feel like they belong to something special. This could be in the form of giving them exclusive discounts, access to ‘members only’ content, early access to new product launches and much more besides.
And you can reward loyalty. Whether you integrate your email marketing campaigns with a CRM system or do something far simpler and ‘reward’ your top subscribers with some kind of gift (think discount codes, a special piece of content, or even a freebie), rewarding loyalty strengthens the relationship between you and your subscribers.
It’s a fantastic way to tap straight into raw emotion and feelings. An unexpected reward will delight even your customers with the coldest hearts.
2. Add value and be a force for good
Going in with a hard sell when the purse strings are being tightened could see your marketing efforts fall on deaf ears. But that doesn’t mean there isn’t an opportunity. When you can’t push a sale your messaging has to evolve. Look again at the examples we saw during the pandemic. Gyms started sending out home workout ideas, restaurants sent out recipes to cook at home, and hotels gave their subscribers tips for ‘at-home’ spa days.
The best thing about this is – when you focus on serving the needs of the customers, enriching their lives through your content, and giving them value – you’re tapping into their emotions and you’re laying the groundwork for them to become loyal customers and giving you repeat business. The irony is by not selling, you’ll end up driving more revenue in the long term.
In short, keep showing up. Keep being there for your customers. Show them you value them, that you’re there for them, and look for ways you can be a force for good in their lives. You could do a lot worse than taking a leaf out of sustainable clothing brand Patagonia’s book. They bucked the Black Friday trend last year with an email campaign that had the subject line: “Buy less. Demand more.” Inside they challenged their subscribers to change the world through their shopping habits. It was thought-provoking, educational, and powerful. Their values and beliefs sing through their marketing and the result is a much stronger brand with fiercely loyal customers.
3. Re-evaluate your plan and strategy
As we noted previously, focusing on loyalty and adding value is where you’ll see the best results. This might mean a shift in your strategy to put existing customers front and center rather than chasing new business.
It also means being agile in what you offer. You may need to pivot or adapt (at speed) to circumstances out of your control. The key to doing this is having a mindset and a culture that allows you and your team to be agile.
For example, your email marketing strategy might need tweaking and your KPIs might need to shift to focus on growing brand awareness, keeping ahead of your competitors, and maintaining market share. With any shift in strategy, it always pays to test what’s working and what isn’t – and A/B testing your email campaigns is a great way of doing this.
You should also look at any automated email marketing campaigns you have running. Email marketing automation is a fantastic way of working smarter and not harder but it’s worth double-checking your messaging to ensure it doesn’t come across as tone-deaf.
4. Spend your budget more effectively
In a recession, every penny counts and so does measuring your marketing spend. Use marketing channels like email that are low-cost to deliver but have a high-impact performance.
Email marketing delivers the highest ROI of any other marketing channel – digital or otherwise. For every £1 spent on email marketing, £36 is generated. When marketing budgets are squeezed, being able to show ROI takes on even greater importance. For example, if you’re able to attribute £10,000 of revenue to an email campaign, you’re instantly able to prove its worth and justify the money being spent on it.
By having the right revenue attribution models in place you can dispel the notion of marketing being purely a cost center for the business.
5. Consider the case for outsourcing
It’s not easy to do everything we mentioned above on your own, which is why it pays to bring in the experts.
Taking the example of email marketing, a specialist email marketing agency will make sure you get the best ROI from your email campaigns and be a voice at your side you can trust to help you make the best decisions.
But outsourcing goes further than this in a time of recession. It can help you reduce overheads and operational risk while giving you the flexibility you need to dial your service levels up and down as you require.
Plus you get the added bonus of working with experts who can guide you to make sure your messaging and communication are perfectly engineered to work in a recession.
Reigning in your marketing efforts and budget when recession bites might instinctively feel like the right thing to do but, in reality, it will only harm the business in the long run.
Shift and adapt your marketing strategy and you’ll be able to get the edge on your competitors, build loyalty, retain existing customers, and grow brand awareness.
We believe email marketing is one of the best and most cost-effective ways of doing all of the above and we’d love to show you how. Get in touch and we’ll show you what’s possible.