Recession-Proof Your Business with Marketing

In a recession, if you attempt to weather the storm by cutting back on marketing, you may be putting your brand, share of voice and competitive edge at risk.

Whether or not Australia is headed for a recession probably depends on which economist you listen to. But with the pandemic followed by rapid inflation and rising interest rates, what isn’t in dispute is that it’s been a rough few years for consumers and businesses alike.

During an economic downturn, the needs of consumers change. They become less likely to splurge on luxury or non-essential items, especially in low and middle income households, and may also begin to look for cheaper alternatives to essential items as well.

And that means the marketing strategy, messaging and sales content that worked for you in the good times might not work so well when times are tough.

However, you do still need marketing, and lots of it.

Maintain your marketing budget

When the pandemic hit, one of the first areas of business to see cuts were marketing budgets. As it turned out, this was completely the wrong strategy for most businesses.

On the surface, this might seem like a sensible economy. Focus more of the spend at the bottom of the sales funnel and cut back on the top-of-funnel “fluff” that always seems harder to attribute to concrete sales. You want qualified leads, not social media followers or e-book downloads!

But success at the bottom of the funnel depends on growing audience awareness at the top. It’s often the “fluffy stuff” that builds the necessary brand recognition and product awareness that leads a potential customer to click on your organic link or paid ad in search instead of one of your competitors.

If your marketing disappears or shrinks dramatically, you risk your target audience shrinking also. Perhaps forgetting about your brand entirely. 

Your audience and your hard-won ROI numbers won’t just magically reappear when you turn the ads back on. By the time you start to ramp up your marketing activities and advertising spend once more, you may have already squandered a lot of the presence, share of voice and brand familiarity that previously took years to accrue.

Global media researcher Dr Simon Broadbent once wrote: “The sales of a brand are like the height at which an airplane flies. Ad spend is like its engines: while the engines are running, everything is fine, but when the engines stop, the descent eventually starts.”

The tendency for businesses to cut costs in a recession also creates a huge opportunity for those businesses electing to maintain or even increase their marketing investments.

If your competitors decrease their marketing, your own marketing has a much greater chance of cutting through to increase your market share. While others cut back, competition for the most valuable keywords in the search rankings may also favour those who continue to invest in publishing well-produced content backed by solid SEO. 

The result is more traffic to your website, boosting awareness of your business and nurturing more leads into sales.

Align with changing consumer behaviours

Maintaining your marketing budget is one thing, but that doesn’t mean sticking with the same strategy, messaging and content as before.

Your marketing always needs to align with current consumer behaviours. Re-evaluate your brand positioning and strategy based on the spending habits and needs of consumers. What might have been your best performing products before might not return the same value now. 

Similarly, the messaging that resonated with audiences before might seem out of touch now. Your messaging needs to reflect that consumers have shifted their priorities. They’re thinking more about reducing costs, cutting frivolous spending and maximising value. Suddenly, those bags of oddly-shaped carrots in the supermarket look like a good deal.

As a result, they’re also likely to do far more research before making a purchase. Which laptop will last longer? Which box of cereal goes further? Which car is cheaper to run? How will you answer these questions?

That’s not to say cost and value are the only factors consumers care about. But when money is tight, or at least tighter than it was, cost and value can loom even larger in people’s minds.

Businesses that recognise these changes and adapt their marketing to keep up with them will perform much better.

Build on customer loyalty

A lot of the focus in marketing tends to be on customer acquisition, continually finding and converting new clients. But your existing customer base may be an even richer source of sales – and they’re easier to market to as well.

Not only that, but as priorities shift, some customers may be considering whether to switch to a competitor. Don’t take your existing customers for granted but continue to prove to them that you’re still the right choice.

Stay in touch with them through newsletters, surveys and updates. If your sales data allows you to segment your customer base in meaningful ways, use targeted email campaigns or send exclusive offers and coupons to those customers most likely to be interested according to their previous purchases.

Regular communications not only keep your brand top of mind until the next time a customer might need your products or services, they also demonstrate the stability and dependability of your business – which builds trust. Whatever else is going on, your brand is always there, still listening, still providing the same great service.

Iterate, adapt and improve

You can make some predictions and educated assumptions based on trend data, but data is historic and the future will always refuse to be pinned down. Your marketing strategy, therefore, must be fluid and flexible enough to adapt as the consumer landscape continues to evolve.

• Set clear goals, defining what you want to achieve with your marketing efforts.
• Assess current strategies to identify what’s working and what isn’t.
• Allocate your budget wisely by focusing on high ROI channels.
• Continually monitor and adjust by tracking performance and tweaking strategies as needed.

Above all, try to avoid falling into the trap of doing things just because that’s how it’s always been done. Now is not then. Circumstances have changed – and will continue to change. Test every assumption. 

Eventually, every recession ends. Every economic downturn eventually turns upwards. And when that happens, you’ll need to adapt your marketing once more to take advantage of fresh opportunities.

Until then, be prepared. The competitive edge is yours to lose – or win.