A recession is tough for any business, but it can be especially challenging for marketers.
Marketing is an industry built on capturing leads and turning those leads into paying customers. However, marketing is usually the first to go during a recession because companies typically do not tie this investment directly to revenues.
In other words, the recession will affect marketing in various ways. Here are some ways it will affect the industry and what businesses can do to capitalize on the opportunities during a recession.
In times of recession, sales and marketing teams often become adversarial rather than collaborative. Sales focus on closing deals, and marketing focuses on generating leads.
For sales and marketing to work together effectively, they need to understand each other’s roles and how they fit into the bigger picture. This can be challenging since salespeople tend to focus on short-term results, while marketers tend to think long-term.
However, both sides need to understand what they’re looking at — and that’s where key performance indicators (KPIs) come into play. When using KPIs as part of a strategy, they can bridge that gap between sales and marketing by providing information about how well certain procedures work together over time.
While the current economic climate is challenging for businesses to navigate, it can also be an opportunity for marketers to learn and grow.
As the economy continues to decline, marketers will use the recession to adapt and improve their marketing skills. They’ll also leverage this time to develop stronger relationships with clients and partners because they will understand what makes these relationships successful.
By learning how to manage marketing budgets effectively, marketers can create campaigns that deliver value without breaking the bank.
Companies have already started cutting costs and increasing layoffs. As businesses reduce their budgets, this becomes a huge problem since marketing is one of the most important departments for any business. It’s what gets new customers and retains satisfied ones.
However, companies will cut costs to stay afloat. They will look for cost-effective ways to reach their target audience and increase revenue.
With less money, companies will lay off their marketing employees — resulting in fewer skilled and knowledgeable people to assist with marketing efforts.
Focus on ROI will also increase. Though it’s challenging for companies to spend money on marketing, they will put more pressure on marketers to prove ROI. In this type of environment, marketers find it difficult to verify ROI because of the following:
- A lack of goals.
- Poor lead tracking.
- A lack of customer feedback.
A recession is when people need to focus on what’s important, and small businesses are no exception. Therefore, we expect a return to more traditional digital marketing strategies as the economy shifts.
Generally, companies will keep investing in strategies such as email marketing, social media marketing, content marketing and search engine optimization (SEO). These strategies have been proven to work overtime because they help increase brand awareness among potential customers.
Plus, they are more cost-effective and allow companies to reach customers without requiring large investments.
Even during an economic downturn, businesses should keep investing in marketing to maximize long-term results. Yet, a recession will mean companies must be smart and think innovatively to succeed.
This will involve changing a few things to succeed. Here are some strategies that marketers can implement below.
It can be tempting to think that the only way to make money is to lower prices and undercut competitors. However, an economic downturn is when companies must take advantage of it and use their time to differentiate themselves.
With competitors spending less on advertising and marketing, this gives companies a chance to adapt their messaging and emphasize value. Consider reflecting on what’s happening in people’s lives and send a message that resonates with the target audience.
Marketing messages should reflect their feelings, so it may require brands to understand customers’ new needs and adjust their tone accordingly,
With a little creativity and savvy marketing, small businesses can succeed despite a tough economic climate.
Nonetheless, this will push companies to decide on a new strategy.
For instance, a strategy may no longer be about increasing sales. Instead, it would be about finding new ways to increase revenue while minimizing costs.
Once they’ve determined a strategy, companies must decide what is working and what is not. Therefore, they will need to use KPIs to assess the performance of the company’s new strategy and set realistic target goals.
Not only will this be effective in saving time and money, but it will also allow companies to bring in new leads and sales.
An economic downturn changes consumers’ spending habits, leading them to spend less on items they don’t need.
When people have less to spend, they become more discerning about their purchases. Therefore, it makes sense for companies to focus less on gaining more customers and shift toward the existing customer base.
One way they can ensure this is by making the most of each customer relationship to retain their loyalty. They can start by sending more personalized emails to stay in touch and make customers feel appreciated. By showing them appreciation, customers will be more likely to stay and keep returning for more.
By focusing on existing customers, the companies can ensure they are confident while weathering the storm.
The recession will impact the marketing industry in various ways. However, marketers are resilient and are used to adapting to new changes in their industry.
There will always be further opportunities to take advantage of during a recession, so the best thing to do is to continue refining strategies and focus on getting better results each time. The more focused we are, the stronger we will be on the other side.
Eleanor Hecks is editor-in-chief at Designerly Magazine. She was the creative director at a digital marketing agency before becoming a full-time freelance designer. Eleanor lives in Philly with her husband and pup, Bear.