Recession: Opportunity or threat?

We’re an ambitious agency who pride ourselves on our business as much as our marketing smarts. Between our three founders we’ve built four thriving 7-figure businesses. Over the past 15 years you could say we’ve been around the block. Quite a few blocks actually.

So on 12 March 2020, we gathered our entire team together and let them know what was about to happen. We told them they’d be working from home, we’d be losing a ton of revenue and that we’d come out the other side a better and stronger company. And we meant it.

Here at Rocket, we see the economic disruption triggered by COVID-19 as an opportunity.

By now, we’ve probably all read the same articles (like this and this from the HBR). We all know that the companies who maintain or increase marketing spend come out of recessions stronger than those who reduce it. The trouble is that a lot of people don’t know how to do this properly, or their business panics and they cut back anyhow.

This manifesto articulates the 12 declarations Rocket will be following in the months ahead to grow our own market share.

We’re so bullish that the current conditions are perfect for growth, that we’ve doubled-down on our own marketing. We intend to look back in two years’ time and know we squeezed every last drop of opportunity from our competitors’ decisions to reduce marketing spend, the size of their teams and therefore their capabilities.

You may not yet be ready to make the tough decisions required to make this happen. That’s a decision only you can make. Or you may not be sure your business will even make it far enough to take advantage of the opportunities. We’ve got plenty of practical survival ideas for you here.

Still reading? Perfect! We’ll take you through the 12 declarations that are key to growing your market share starting today. Get ready to look back on this period as an incredible opportunity for your business.

David Lawrence
James Lawrence

This is really important. It’s easy to hear feel-good messages about the benefits of marketing in a recession and think they are true. But you need to believe it. You need to understand how it works. You need to get to the point where you’re
vigorously arguing with stakeholders that now is the time to invest more in sales and marketing than ever before. That there is untapped potential to grow market share via marketing in your industry starting today.


Here’s a graph to get started. See the right hand columns? They represent the companies that increased their marketing investment during recession. They grew. See the other columns? These represent companies that maintained or reduced their marketing spend. Don’t be those companies.

And here are the views of some better qualified people and larger businesses on the topic.

“We have a philosophy and a strategy. When times are tough, you build share.”
A.G. Lafley, CEO, Procter & Gamble

“Winners pulled away from losers during the last recession and widened the profit and market-cap gap during the subsequent expansion, Bain’s analysis of nearly 3,900 companies worldwide shows.”
Tom Holland and Jeff Katzin, Partners, Bain & Company, 2019

“The best performing companies did little expansion during economic booms. They declined to pay up for mergers and acquisitions, using the good times to build up their finances.”
Bill Conerly, Forbes, 2020

“In Argentina, after the recession of 1999 turned into the crisis of 2001, many people had to abandon their preferred brands of consumer goods in favor of economy brands. The premium brands that successfully weathered the storm did so by offering affordable new formats and cheaper packaging, focusing attention on performance and value, and, when the crisis ended, celebrating with positive and upbeat communication.”
Nigel Hollis, Chief Global Analyst, Millward Brown, 2008

“The losing companies tended to follow a few recession dead ends. Some tried to slash and burn their way to the other side, under the misconception that extreme cost-cutting would be enough to survive the storm. They cut R&D across the board, scaled back on sales and marketing activities, laid off valuable talent and ruled out acquisitions. Other lagging companies strayed outside their core business, investing in the latest hot sectors and tools, praying for a winner. Still others tolerated poor results during the downturn, waiting to see what would happen, and then finally took action—too late because they bought the wrong asset or fell behind in product innovation.”
Tom Holland and Jeff Katzin, Partners, Bain & Company, 2019

“The benefit of increasing the marketing spend during an economic downturn is very well manifested in the profit level during the recovery period and afterwards. During recovery, businesses that had cut their market spend during the economic downturn averaged a fall in profits of 0.8%, firms which maintained their market spend had a 0.6% increase in profit while those businesses that increased their marketing spend during recession enjoyed an average increase of 4.3% in profit.”
George Amissah, PhD and Udih Money, PhD, International Journal of Business and Social Science, 2015

If a company fails to maintain its share of mind during an economic downturn, current and future sales are jeopardized. Maintaining “share of mind” costs much less than rebuilding it later.”
George Amissah, PhD and Udih Money, PhD, International Journal of Business and Social Science, 2015

You should assume that your market is going to continue shrinking in the coming months. It’ll be hard to win new customers and generate new opportunities. But if this is true, it will be the case for everyone.

Here’s the reality though. When this is over, and things start to recover, regardless of the speed of recovery, most of these customers will again need to buy what you sell. And when they do, a lot of them will research the market and give their business to who they think can best solve their problem at that time. This will very often not be the company they used to do business with.

Win more of this business than your competitors and you’ll grow back faster than they do. Your market share will have increased and ultimately so will your revenue.

But it starts today by making sure that your prospects (including ex-customers) are aware of you and your offering. This is where marketing comes in. When it comes time to buy, you need to be in the conversation.

Here’s a final thought.

“As companies slash advertising in a downturn, they leave empty space in consumers’ minds for aggressive marketers to make strong inroads.”
Peter Fader, Wharton School, 2008

Do your business a favour, be the aggressive marketer. If you aren’t responsible for setting marketing budgets, share the commentary above with the people who are.

Another reason for growth opportunities coming out of a recession is that some of your competitors simply won’t make it.

Apologies for the US-centric data, but here is a good recent example of the financial crisis of 2008. The spike in business failures is strong and very clear.

Your number one priority right now (other than looking after the health of yourself and your community), is ensuring your business survives the crisis itself. Don’t be a spike in a future graph.

No-one knows what’s going to happen in the coming months. But common sense would suggest we’re in for a lot more social isolation and further economic pain. Don’t assume the worst of things are behind us. And the longer it goes for, the
greater the chance of prolonged economic pain through the recovery.

If you have not already built a model that shows how you’re going to survive this, then do so before reading on.

If you need marketing tips on how to survive the COVID-19 crisis, then download our free COVID-19 Marketing Survival Handbook. This handbook contains easy-to-follow steps to help you get through the initial shock of COVID-19.

Without careful planning and execution, it’s unrealistic to expect an increase in market share from the most disruptive health and economic shock in modern times. You need goals, and specific people who are capable of, and can be held accountable for, hitting them.

Here’s what you need to do:

1. Build a team consisting of smart and motivated people. Make sure sales, marketing, customer service, product and the executive are all represented. If you’re already a small team, this will be much easier.

2. Have no more people in this team than you absolutely need. Small teams representing different parts of the business will make better decisions. You’re looking for volunteers, not conscripts, who believe in this as much as you do.

3. Give the team real authority and budget. Make sure they report directly to the CEO. Again, if you have a small team this will be easy.

4. Make sure sales and marketing are on the same page from here on in. No more blame game or pulling in different directions. This is critical. You’ll fail if you let sales and marketing blame each other when things get tough. And things will get tougher before they get better.

5. Make a clear decision on what your marketing goals are for long-term success. This will vary according to your specific business. Your goal can’t be ‘make more money’. Speak to us if you need help on this as you need to get this right.

Here are some possibilities:
• Building brand awareness
• Growing the database of prospects
• Building a sales funnel (this might be the most valuable asset any business can own right now)
• Generating sales / conversions
• Or a combination of the above

The majority of businesses in Australia are still generating revenue. Amongst all the doom and gloom you need to remember this. For most of us, prospects are still seeing our websites and other digital assets. From this they are forming an opinion on us based on our core messaging.

Here’s how our own messaging changed after COVID-19 changed our prospects lives.

Our messaging reflects the fact that we want to work with businesses who know they need a quality marketing partner to make the most of the current opportunities and challenges. It’s important they know we understand their current problems, not the problems they had before this all started.

It will be the same with your customers and prospects. If their problem, and the value you deliver to them, has changed then your messaging needs to reflect this. You want to join a conversation that is already going on in their heads.

Our advice to our clients is that they need to have a message for where their prospects find themselves right now. This message will likely change as the crisis changes. And just as importantly you need to have a message ready to go when
the recovery begins. You need to be able to act in real-time as things change.

We’ll take it as a given that your P&L has already been reviewed and the things you don’t need have already been trimmed. A crisis is a great opportunity to get lean and only invest in things that matter.

What we want to focus on here are the changes you should make to how you spend money in marketing.

Subscriptions & software

Marketing technology (martech) has exploded in recent years bringing incredible power and automation to smart marketing teams. But I can almost guarantee you’re spending money on martech that doesn’t generate justifiable value. Review these expenses with an eye to value. We are not saying kill martech spend, far from it, it is fundamental that you have the appropriate marketing automation and CRM platform(s). We are saying that virtually every business we audit is paying for some systems and software they don’t use.

Media budgets

For many businesses, bottom of funnel media budgets (money spent on finding people ready to buy right now) are not currently generating a healthy return of advertising spend (ROAS). Consider reducing these budgets for the time being.
But be ready to ramp them up again when demand justifies it.

We’re also seeing budgets being wasted as newly trending, but unprofitable keywords appear. Likewise, we’re seeing budgets being wasted on products or services that can no longer be sold. Review your keywords regularly and be careful with what you’re bidding on.

You should also review your bid modifiers. There’s a very good chance they’re broken. Working from home has changed everything from commuting to lunch breaks to weekends. Depending on your business you’ll need to reassess your
standard busy and quiet times. Likewise, you might find your regional search behaviour has changed. Moreover, we’re seeing a shift away from mobile browsing, so bid adjustments at the device, location and schedule level should all be reviewed.

Beware of media you cannot measure

Media budgets are being cut ruthlessly across many industries. They are also being cut harder in particular forms of media.
We expect to see non-measurable forms of media to be cut more harshly than those where businesses can see the results of their investments. You don’t want to spend on advertising that is ineffective. In truth this can be a challenging thing to measure, particularly when it comes to building awareness for a brand. Regardless, you should critically review any media budgets that are not able to be connected to a KPI that will generate revenue at some stage.

Don’t jump at data shadows

The huge number of people now working from home has caused some major issues in reporting. We’re seeing spikes and troughs just like in the stock market. If possible, don’t make big changes from small data sets. If you’re in the B2B space you will also be seeing unusual results as users who were once behind corporate firewalls are now appearing separately in your reports. Your IP filters are also now gone, which means that internal traffic is no longer being removed from your analytics reports. It’s possible for traffic to be up but conversion rates to have fallen as a result. Review your data carefully before deciding something you’re doing is no longer effective.

Here’s an interesting thought:

“Most estimates suggest advertising investment is likely to be reduced by between 30% and 60% over the rest of 2020 and beyond. Marketing Week’s latest survey suggests that around 90% of marketing budgets have been delayed or are under review.”
Mark Ritson, Marketing Week, 6 Apr 2020

This sums up one of the greatest marketing opportunities any of us are likely to see for many years. As money is deserting different forms of advertising, CPCs and CPMs are falling to levels not seen for many years.

If you have the ability to buy cheap advertising which generates a return on an important KPI then buy it while it’s on sale. Let your competitors fear, or budget constraints, be your opportunity.

Digital vs. traditional

There are predictions that digital will gain market-share from traditional media as a result of COVID-19. The world is being force-fed a diet of digital at the moment and it’s unlikely people will retreat from this when the recovery happens. In addition to digital capturing an incredible amount of people’s attention, it’s also much more measurable than traditional forms of media.

Digital is experiencing an explosion in growth and remains more measurable. Consider moving budgets into this area.

Seriously consider Conversion Rate Optimisation (CRO)

Genuine prospects are like gold for most businesses at the moment. Don’t be that business that misses out on a lead because their competitor’s website was more effective. Now is the time to work out how to do more with your existing traffic by increasing your conversion rate.

Invest in content

Some of the most effective marketing in the coming months will be top of the funnel. That is, it will be designed to increase the awareness prospects have of your brand. The best way to do this is via high-quality content with a focus on growing the number of people you will ultimately be able to sell to. When creating content, focus on solving people’s problems.

More specifically, invest in video content

If you were sitting on the fence with video pre-COVID, then you need to take a stand right now. Whatever it is you have to say, you need to urgently work out a way to say it via video. Best of all, know that a lower production value is more acceptable now than ever before. We’re even seeing mainstream television shows broadcasting from people’s living rooms, so don’t hesitate to get in front of your webcam. Your prospects want to consume video – be the company that
delivers it to them. Here’s what we had to say about video before the world changed.

Social media

Right now we’re seeing crazy numbers in social media. A combination of uncertainty, spare time and remote work is resulting in huge spikes of activity. At the same time, we’re seeing advertising spend being cut. The result is that costs in some industries are right down. If you have a message which can generate value for you now or in the future, now’s the time to review your social strategy and budgets. This opportunity won’t last forever.

Run a series of webinars

With the ability to learn in person severely restricted, we’re seeing enormous growth in the effectiveness of webinars. Sign-ups and engagements are sky-rocketing. If you’ve got a valuable message, it’s time to consider delivering it via a
webinar. You can’t go wrong with Zoom. Record your webinar and use the content to generate leads well into the future.

Improve your remarketing campaigns

Even if your prospects aren’t buying today, you can still heavily influence their future purchases by overhauling or launching your display and social media remarketing strategies. Increase the timeframe for which these remarketing ads
display to your customers and re-assess the ad frequency over time.

From us to you, here’s the most effective marketing tool you have at your disposal right now:

“How can I help?”

That’s right. A simple question. You need to ask this of your customers and prospects. They will answer you and provide you with incredible insights into your market. For free.

The things you learn will provide you with actionable insights you can apply to your sales funnel, your offers, your product, your customer service and more. Importantly, a lot of your competitors won’t be asking this question. As a result, their offering will be less effective in solving your prospects current problems.

Here’s some examples of Australian businesses who have listened to their customers and made pivots in recent weeks. There are thousands of examples out there.

Online delivery has been severely limited through Coles and Woolworths. Harris Farm seized the opportunity and ramped up their online delivery services massively. Their latest innovation are 4 pre-packed boxes you can order and
have delivered to your home in a few days. On their site they even mention customer conversations being a trigger for this pivot.

Elva’s Restaurant in Bondi pivoted by offering a cook at home menu. For locals delivery is free.

Red Balloon sells vouchers for experiences. They’ve listened to customers and pivoted by making a selection of these experiences available at home. Fancy some laser tag at home or a kids DIY Chocolate Art party? It’s all possible.

Anyone familiar with how we approach our marketing campaigns knows we are obsessed with competitor research.

We’ve written and spoken about it before.

Right now, some of your competitors will be thinking as hard as you are about ways to survive, adapt and thrive through the recession. The benefits of competitor research are clearer now than ever before.

Before you take any action, you should review the websites, social media and ad campaigns of your competitors. You should do the same for similar companies in different locations.

Never copy someone else’s work, but do look for inspiration. Be aware of exactly what your prospects are seeing when they look for businesses just like yours.

This is a key part of surviving the crisis and thriving during the recovery. Simply letting people know you exist is rarely good enough when it comes to attracting prospects, let alone converting them into opportunities or paying customers.

Your offer is the way you wrap up your product or service in a nice package. It’s how you make what you’re promoting irresistible to your perfect prospects.

You need to craft a compelling offer right now that makes sense in the context of the recession. You need to revisit this offer as things change and when the recovery starts. In all cases, your offer needs to drive prospects to want to take that next step.

Here are some of the most effective ways to do this:
• Highlight the health and safety steps you’re currently taking
• Offer a bonus product or service with the purchase.
• Offer a free or very cheap product or service to help people get comfortable with your company.
• Bundle your product or service with other items your prospects will value.
• Offer a discount.
• Offer free or fast shipping.
• Offer a guarantee.
• Offer a free trial period.
• Limit the quantity or time your offer will be available for.
• Offer a payment plan to reduce the upfront financial burden.
• Donate some part of the purchase price to charity.

The best way to craft your offer is to build out a list describing how each of these elements might work for your product or service. Then, based on what you know about your personas and your product or service, develop an appropriate offer strategy. You might use one of the elements mentioned in the list above, or you might use a combination.

You might be uncertain about which elements will work best for your product or service right now. Our advice is to experiment with the ideas you think are most likely to work. You should also look at the reasons existing customers already buy from you. If you’re not sure, then speak to a sample of these people. Existing customers can provide valuable insights into effective future offers. Learn what is most likely to change behaviour and go from there.

Something that is becoming very clear is that the companies with the most options right now are those with the strongest sales funnels.

Ryan Deiss of Digital Marketer describes a sales funnel as a “multi-step, multi-modality process that moves prospective browsers into buyers”.

A sales funnel is a step-by-step process for making the most of every prospect that comes into contact with your business. It often involves stages including:

• Effective ways to cost-effectively drive traffic to your high-converting website or landing page
• Valuable content to collect email addresses and other contact details (like this guide)
• Automated emails to help nurture prospects not yet ready to buy
• Strong offers to trigger sales now or in the future
• Best of breed sales processes and/or sales people to turn interest into revenue at a higher rate than your competitors

The reality is that only a small percentage of people who view your website are ready to buy today. For most businesses, it’s less than 3% of all visits. A sales funnel is the way for you to capture as many of the other 97% as possible.

The goal is to be able to nurture, and ultimately sell to, your entire market when the time is right for them to buy.

Every business should understand what the perfect sales funnel looks like for them. It’s critical to growing market share at any time, and most particularly during the coming recovery.

If you’d like a free video-based chat with one of our marketing strategists then get in touch and we’ll be more than happy to help. We can give you some great ideas relevant to your specific needs.

We remain stunned by the number of otherwise smart companies who allow their sales and marketing teams to exist in separate silos. It makes no sense.

According to the Harvard Business Reviewwhen Sales and Marketing work well together, companies see substantial improvement on important performance metrics: Sales cycles are shorter, market-entry costs go down, and the cost of
sales is lower
”.

Keep them apart and you’ll not only lose the above, but you’ll also give people in both teams the ability to blame the other for poor performance. You’ll find it hard to ever know where the real problem exists. During good times small cracks could
be papered over through targets being met. This is unlikely in coming months for most businesses. Cracks will appear, the blame game will start and your business will suffer. Front foot this now.

Ever heard a sales person use the quality of leads as their excuse for missing their sales targets? Ever heard a marketer tell you that revenue is down because the sales team aren’t making their calls or doing their job properly?

By keeping these teams separate you are encouraging an Us and Them culture. There is not a single reason this is a good idea. This should never be acceptable in any company. But in the current climate, and the one to come during the recovery, it will severely limit your ability to make the changes needed to grab market share.

Here’s some tips to get your teams working together more effectively:
• Have key members of sales and marketing in your recession recovery team.
• Have them work on creating content together.
• Have them analyse and agree on the customer journey together.
• Have them develop buyer personas together.
• Share marketing, sales and customer feedback in real-time with both teams
• Have them sit together where possible.
• Arrange recurring meetings to plan upcoming periods and review and analyse results.
• Have them collectively own relevant metrics across both sales and marketing.

Do not confuse business growth with growth of market share. We are in for a tough period and few businesses will be able make the revenue and profit targets they once did. But this does not mean you are failing. If you can take more of the pie than you once did, you are setting your business up for serious growth in the years to come.

Let’s be real, increasing your market share in the current crisis and future recovery is not going to be easy. There will be ups and downs. There will possibly be times when you look at the money and energy going into marketing, and you look at the results being generated, and you question whether this is the right path.

But hold firm and trust in your plan.

Revenue will return to your market. Customers will be shaken free from existing businesses and at some stage they will need to once again make a purchasing decision.

Some of your competitors won’t make it.

Many of them will be so focused on survival that they won’t take the steps you’re considering and they will take many years to recover the revenue they had early in March 2020. As predicted many of them will aggressively cut their sales and
marketing teams.

Opportunities will appear and the work to take advantage of them starts today.


The Recession Marketing Manifesto

Grow, shrink or fail? Today’s decisions will shape your future.

  • I will understand why growing market share is easier in a recession than a boom
  • I will ensure ‘survival’ is taken care of right now
  • I will build a recession recovery team and give them budget and authority
  • I will update my core messaging
  • I will cut spending on the dumb stuff
  • I will increase spending on the smart stuff
  • I will learn from my customers and prospects
  • I will learn from my competitors
  • I will create offers which generate value
  • I will build the best sales funnel in my market
  • I will make my sales people and marketing people BFFs
  • I will increase my market share (even when it gets hard)


It’s time to commit to growth

We believe in this manifesto. It reflects the steps we’re taking here at Rocket to make sure we’re a bigger and more profitable agency next year than we were before this started. It’s based on what history tells about the opportunities available to those who know how to market effectively.

If you agree and have the skills in-house to make this happen then we’re genuinely excited for you. Drop us a line and let us know what you’re doing and the results you’re seeing.

If you’re onboard with the concept, but need some advice or assistance to make the most of the opportunities, then we want to talk with you. If there is anything the team at Rocket can do to help, or any question we can answer to help give you clarity, don’t hesitate to be in touch.

It goes without saying that we’re happy to share our experience and thoughts without cost if it helps you get moving.

You’ll find us at rocketagency.com.au/contact or 1300 059 620.

Good luck and take care,

David Lawrence
James Lawrence

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