We’re facing a downturn. Yup. Did that. Said it out loud. Quick, touch some wood so it doesn’t happen. Wait, maybe you touch it so it does happen. Doh.
According to forecasts from Infometrics, the New Zealand economy “might just be able to avoid a recession”. Even if a technical recession is sidestepped, “the bulk of the economy will feel like it is going through a contraction anyway.”
So maybe there’s hope yet. But that’s not really my question.
In a downturn, should you still invest in marketing?
And every marketer that you ask, will say “Yes!” Well of course they would, they’re probably feeling it as much as you are and need to get some work in the door too.
As a marketer, I do hold the belief that wherever possible you should continue to invest in marketing, but as a previous business owner, I understand that every single business is unique and goes through quiet periods differently.
1. If you can, keep going
If you can, it is best to push through and keep doing what you’re doing. In examining the differences between ‘winners’ and ‘losers’ after recessions, those who came out on top did so because they gained more market share – their competitors went quiet, so customers switched to them.
Harvard Business Review says, “firms that maintain their marketing spend while reallocating it to suit the content – be it in product developing, advertising and communication, or pricing – typically fare better than firms that cut their marketing investment.”
2. If you can’t, hold the fort
If you need to save/keep as much money as you can to survive, then make sure your online presence is on point – because this is how customers will find you – in the quiet and in their own time.
Can you be found online? And don’t just search yourself because your browser history makes it look better than it is, get someone on the outside of your business to check. Can you update your website easily? Because Google will rank you higher in results if you are constantly updating your site with valuable stuff. Are you proud of your website and can people unfamiliar with your business, find what they’re looking for? If it’s too hard, they’ll go elsewhere. When was the last time you posted on your social media channel(s)? If it was a while ago, potential customers will question whether you’re still operating.
Some recession-resistant strategies
Those who came out on top did so by outperforming their competition. They found ways to increase revenue through innovation and branding pivots. Here are some recession-resistant strategies that might fit your business.
Cross-sell and upsell to your existing market
You already have a list of customers, the quickest bang-for-your-buck is to market to them to purchase again or offer ‘some fries with that’. Make the most of your captured market by sending information about your business directly to their inbox with a newsletter and posting regularly for your followers on social media channels.
If your business is experiencing some quiet time, then you can do your own marketing by updating your website and social media channels with fresh content. Post valuable content that helps your customer, you’ll earn their trust through the tough times, and you’ll come out of it with a bigger audience who will then be ready to spend their dollars with you.
Get disruptive
Disruptive marketing is experimental tactics that challenge the status quo, but I also like to think of it as doing something standard in marketing – like writing articles – but making it attention-grabbing – like a headline ‘Size does matter’ and then going on to talk about how the size of a heat pump makes a difference in your home. Disrupt your audience, stand out to get attention and enquiries.
In America, each year, millions of people tune into the Superbowl, and each year, millions of dollars are spent on TV advertisements that air during the game. Ad costs can be higher than $5 million for a 30-second spot, yet big-name companies such as Pepsi and Budweiser, continue to pay for these ads.
Volvo decided to take a different approach to Superbowl advertising and offered an excellent example of disruptive marketing at the same time. During the Superbowl in 2015, Volvo told customers to tweet at them with the hashtag #VolvoContest whenever they saw a commercial for another car company. In the tweet, they encouraged users to make a nomination for one of their loved ones to win a Volvo automobile.
Volvo called the campaign “The Greatest Interception Ever,” which speaks to the way they managed to shift the conversation away from their competitors. Every time customers saw a commercial for a different car brand, they immediately thought of Volvo and interacted with them instead. Not only did this disruptive marketing tactic become a win for Volvo, but it was also a huge blow to competitors.
Identify with your clients
Which group do your customers fall into?
- The hardest hit – most affected financially by a downturn and in response, reduce spending
- The planners – save money where they can and maintain the status quo
- The well-off – happy to ride out the downturn, get a little more selective about their spending
- The unphased – acts as if the downturn isn’t even happening
Shift your marketing to where your clients are. As you can see, most will be looking for a deal or some added value to make their purchasing decisions – so analyse your costs, any added value you can give them, and even your delivery mechanisms.
Look at what is doing well in your business and transfer available marketing spend to focus on that area – kind of like a double-down tactic. Stabilisation is the best way to endure an economic downturn, you might just find that the cost of promotion is at lower cost than usual.
Basically
The question is whether you should invest in marketing during a downturn? The answer is yes. If you are confident in your business, that people want what you’ve got, then do it. If you need help – fresh content, a tidy-up on the website or that one idea to disrupt your market, then I’d love to chat and brainstorm in a free consultation. Get in touch.