How To Approach Marketing In A Recession

Firstly, Don’t Panic!

It’s likely that as times get harder the things that have worked for your marketing previously may start to struggle. Often the response to this challenge takes two forms. Both are symptoms of panicked rather than strategic thinking:

1. You increase the budgets of these under-performing campaigns to unaffordable levels in an effort to generate additional revenue in the short-term.
2. You reduce, or cut entirely, your marketing budgets without clear insight into what is and is not working.

If these were the actions you were about to take, take a deep breath and read on. There really is no room for panic if you want to get this right.

Expense or Investment?

A knee jerk reaction to cutting marketing budgets usually means that a company sees marketing as simply an expense rather than an investment. If you’re an in-house marketer reading this article, it’s possible this is how your managers see marketing currently. 

If marketing costs your company money, but you get nothing from it, then you’re doing it wrong. You shouldn’t have needed a recession to trigger the decision to cut marketing dollars. You should have done it ages ago.

But if marketing is doing its job, it’s an investment. That is, for every dollar you put in, you will further down the line, get more money back. How much more depends on your industry and your marketing smarts.

But if your marketing is working as an investment, and you cut it, two things will happen.

1. You will save money in the short-term. Nice.
2. You will in the medium to long-term experience more pain than you are feeling today as the leads and sales that should have been yours, go to your competitors who kept their marketing running. Ouch.

Here’s the Plan

OK so let’s recap. There is a good chance your current marketing is not working as well as previously as a result of tough economic times. And we’ve agreed that panicking is probably not in your best interests. So what’s left?

Opportunity.

That’s right. A recession, or even just bad economic times in your industry, is often a great opportunity for those willing to think their way through the challenges. There are customers out there to be won, you just need to make sure it’s you doing the winning, and not your competitors.

So, here’s the plan:

1. Change needs to happen: Accept that business-as-usual is not going to do it for you. You need to accept that change is coming and that you want to be in control of it.
2. Do a marketing audit: Review everything you currently do in marketing and understand what is working and what is not. Take the advice of experts as there is every chance you are too close to the problem.
3. Be lean: If there are areas that are not working then cut them. Make sure you carefully measure the impact on your sales and leads to ensure that you have not cut something that was important, but hard to measure.  
4. Competitor research: Review the marketing channels being used by your company, and those of your competitors both locally and internationally. Are there places your prospects are spending time and not seeing your message? 
5. What you say matters: Look at your branding, messaging, positioning, pricing and offers. Will they appeal to people who might be under financial strain as a result of challenging economic times? Are your competitors currently doing this better than you?
6. Don’t automatically drop prices: In many markets, regardless of economic conditions, customers are not simply looking for the cheapest price. They want value. This can be particularly true in a recession. Instead of dropping prices, get really good at understanding what people need and communicate your commitment to this effectively.
7. Have a growth mindset: Talk of growth may seem counterintuitive, but there will be many of your competitors who remain committed to the PANIC part of the solution. They may slash marketing budgets or pour money into things that do not work. Some of them will go broke and others will shrink. Smart marketers and smart companies look to grow their market share during tough times and reap the rewards. Getting your marketing right is one of the most important parts of making this happen.
8. Maintain or increase marketing budgets: If your business is viable, there will be marketing money you can spend effectively regardless of the economic climate. You might just need to work harder to find it. At a minimum, remain committed to your historical levels of spending in marketing. You are extremely unlikely to get the same returns from less money, and any cuts will mean you are sailing towards future pain. Remember, marketing is an investment.
9. Stay agile: In unstable economic conditions, things change much faster than during boom times. You need to keep a close idea on what you’re doing as well as on what your competitors are doing. And most importantly, you need to respond quickly to opportunities and threats.

So the answer to the question of how to approach marketing in a recession? 

Be smart and deliberate. And remember that first and foremost, good marketing is an investment that is critical to the future health of your company. If you want to thrive, it’s part of the solution, not part of the problem.

Recessions can be tough – but you can come out of them a much stronger and more profitable business if you see the big picture and position yourself to benefit from it.

If you think we can help, or even just answer your questions, get in touch. Rocket can provide effective marketing audits, strategic plans and, as a full-service digital marketing agency, strategy and execution across a broad range of channels.