In the business world, economic downturns are an unfortunate and unavoidable reality. During these times, many businesses experience declines in sales and profits, layoffs, and sometimes even bankruptcy. In such situations, businesses must quickly make changes and adapt their marketing strategies to ensure competitiveness and growth. This is where recession marketing comes into play.
With recession marketing, your business can avoid the common pitfalls that many businesses experience in times of economic decline. Whether you’re a small business owner or a marketing professional, our comprehensive guide will provide the knowledge and tools to successfully market your business as the economy constricts, and come out better because of it.
It is imperative for businesses to not only maintain but expand their recession marketing strategies. Here is Marketwake Marketing Team Lead Amber Chancy on the importance of recession marketing:
One of the most important aspects of recession marketing is making your company recession-proof. The best way to do this is by maintaining a strong brand presence and developing a recession marketing strategy. Within this strategy, businesses should plan to manage their cash flow, secure alternate financing options, stay away from large investments, and make themselves a necessity to their consumers. Additionally, businesses should begin planning what media channels they want to target and how much they want to budget for marketing.
As recessions linger, more and more businesses will attempt to distinguish themselves to keep their head above water. While some will pull back their marketing efforts, others will find new and innovative ways to market their business. For example, many may utilize AI solutions to make their marketing more efficient, increasing productivity by up to 40%. Although AI marketing may be a crazy idea, often, people who have crazy ideas and trust their gut become pioneers in their industry. In this case, many believe AI is the technology of the future and should be implemented into any business model as early as possible.
However, businesses can also leverage sales personas in their recession marketing efforts and generate leads that keep money flowing through their pipeline. If a business does not have a strong sense of its audience or has not developed a sales persona, its recession marketing strategy will not be as effective and it won’t generate leads. Businesses should develop sales personas for their audience to establish a content strategy that will resonate with them. Making your content relatable to your audience can simplify the process of naturally fostering viewers and converting them into customers.
Understanding consumer behavior is crucial to creating an effective recession marketing strategy. In a recession, consumers are increasingly conscious of how much they spend and what they spend their money on. Because of this, consumers become less indulgent in their purchases, opting to stay home, research, compare prices, and bargain-hunt, rather than go out and spend superfluously. To combat this, businesses may need to adjust their pricing and consumer messaging to add value to their brand and become a necessity to consumers.
This also may lead to increased online shopping as consumers stay home and clip coupons to supplement their purchases. Businesses should invest more heavily in digital marketing channels, e-commerce, and optimizing their online presence rather than just reducing prices to meet the changing preferences of consumers.
Here are some tips to use while developing a recession marketing strategy that will help businesses adjust to the needs of consumers:
Maintaining high brand loyalty is a crucial element of recession marketing. If consumers are truly loyal to a business, they will continue purchasing products or services even when their wallets get tighter. One great way to maximize brand loyalty is by prioritizing the value and affordability of your products and services. Look for innovative ways to offer your products or services, like making a rewards program, offering samples and freebies, or simply adding value by doubling down on your business's strengths.
In a recession, it may not be effective to stick to the same old marketing tactics that have worked in times of prosperity. For example, with B2B marketing there may be more cost-effective tactics that are better at reaching targeted audiences. One of these is B2B inbound marketing. By knowing your audience, developing a killer SEO and content strategy, and nurturing leads, businesses can get eyes on their brand and build new relationships that ultimately lead to conversions.
In this same vein, understanding organic and direct traffic is crucial to implementing a B2C recession marketing strategy. Like B2B inbound strategies, utilizing SEO, content, and social media marketing can increase the organic web traffic that your business receives. When your organic web traffic is greater, it means that your business's website has more authority and shows up higher on search engines. It is important for businesses to keep this strong organic web presence so consumers easily find their website and become potential leads.
On the other side, direct web traffic comes from website visitors who had no referring URL. Because there are no referral links, it can be difficult to determine where direct web traffic comes from. Oftentimes, however, direct web traffic comes from users directly typing a website URL into a web browser. So, if your business has high direct web traffic it could mean that many people know your website intrinsically and go to you first as a trusted source to solve whatever problems they are facing.
Retaining current customers and clients in a recession rather than constantly looking for new ones is crucial. According to Statista, 50% of consumers are willing to switch to less expensive brands in a recession. Luckily that same study found that 40% of consumers will stay loyal to that brand but use it less often. Businesses need to consider how they can add value to their brand and prevent their loyal customers from switching to options that may be less expensive and have worse quality.
A great strategy for retaining customers and maximizing brand loyalty is by creating a rewards program that incentivizes customers to come back for more. One brand that does this well is REI. Their co-op membership program offers cash back on purchases annually, rental discounts, and more exclusive membership rewards that motivate customers to sign up and continuously buy. Not to mention, their marketing team consistently nurtures members through an email marketing strategy that reminds them about their reward benefits and when exclusive offers are available.
It can be a good idea to develop partnerships and collaborations with other businesses during a recession too. Don Markland notes that learning about each other's unique insights can form a strategic alliance that increases efficiency, fosters innovation, and saves money for both parties. Don’t hesitate to reach out to other businesses for help, because they may need it just as much as you do.
One example of this concept is the 2015 Spotify and Starbucks music ecosystem campaign. As part of this collaboration, Spotify offered Starbucks employees free access to their premium membership. In return, Spotify requested that the employees create playlists for the Starbucks stores that could be accessed by customers. This allowed Starbucks patrons to discover and enjoy Spotify's music platform while sipping their coffee, both inside and outside the store. The campaign was a win-win for both companies, as it expanded their reach without diluting their respective brands.
As recessions evolve the standards of practice will too. Businesses must find new recession marketing tactics to circumvent this. One way to get ahead of the curve on their recession marketing will be by implementing a post-cookies marketing strategy. After Google phases out cookies in 2024, businesses will find it difficult to learn about their audience and retarget them. Thus, businesses should start collecting first-party data now to form their audience's sales persona and avoid the downsides of this eventuality.
Another example is that consumer trends are still being influenced by the COVID-19 pandemic. Here is what Marketwake Team Lead Amber Chancy had to say about the growing consumer trends following COVID-19:
There has been a rise in the popularity of brands operating in the health and wellness sector, as well as those in the travel industry. Consumers have become more health-conscious and are interested in products and services that cater to both inner and outer well-being. Travel brands are experiencing a boost in sales as people in legal and healthcare industries are now able to travel again after being on-call for so long. Businesses that have catered to these growing trends are now reaping the benefits and thriving during this recession.
It is imperative that businesses quickly adapt to changing market conditions. If they don’t acclimate properly, businesses may fall behind and end up in a worse position than they were before entering the recession. Here again is Marketwake Marketing Team Lead Amber Chancy, with some final thoughts about the importance of recession marketing:
“There are plenty of examples of businesses successfully investing in marketing during a recession. Apple launched the 3G iPhone during the 2008 recession and increased marketing by 25%. In this same period, Amazon bolstered Prime with the 2-day shipping model while Netflix began development on their streaming platform. By adding value through innovation and impressive marketing strategies, these businesses managed to grow exponentially even in the face of hard economic times.”
It might be difficult, but businesses can stay ahead and break through the recession stronger than they entered. All it takes is grit, resilience, and some help from Marketwake.
The most cost-effective and efficient way to manage all these tips for recession marketing is by enlisting a marketing agency like Marketwake. With Marketwake’s data-driven and performance-based approach, no rut, roadblock, or recession will prevent your business from growing and exceeding the goals you set for yourself. Check out some of the services that we offer:
With Marketwake’s creative services, you can connect with your audience like never before. Whether by crafting visually-stunning websites or designing new logos, our team of experts will help you reach your full potential, and start converting the brand awareness you desire into revenue.
Alongside our creative services, Marketwake offers innovative marketing solutions for the modern business. Our experts will help you adapt to changing target audience trends and overcome the algorithm with paid media, search engine optimization, content marketing, and social media services.
Get the most out of your customer relationships. Marketwake’s expert Rev Ops managers provide valuable insights and recommendations that make CRM management easy for both Salesforce and HubSpot users, setting you up for success to meet any business goals you may have.
Ready to get started? Contact us! We’ll help you set up and execute your business's recession marketing strategy in no time.
Recession marketing refers to the strategies and tactics that businesses use to promote their products or services during a period of economic recession. During a recession, consumer spending tends to decrease, and businesses may face challenges in generating revenue and maintaining profitability. In response, businesses may need to adjust their marketing strategies to continue reaching customers and generating sales.
Some strategies include:
Yes, marketing is important during a recession. In fact, it may be even more important than during times of economic growth. During a recession, consumer spending tends to decrease, leading to reduced sales and revenue for businesses. To maintain profitability, businesses may need to adjust their marketing strategies to continue reaching customers and generating sales.
Marketing during a recession can help businesses in several ways:
Advertising in a recession tends to be affected by the overall economic climate. During a recession, businesses may reduce their advertising spending and look for ways to cut costs and preserve cash. This can decrease overall advertising activity as businesses scale back their ad budgets.
However, factors like the industry, type of advertising, and target audience can impact advertising during a recession greatly. For example, some industries may see increased competition during a recession, which could lead to more advertising to differentiate from competitors. Similarly, some types of advertising, such as digital advertising, may be more cost-effective during a recession, as businesses look for ways to reach customers at lower costs.
A recession strategy is a set of tactics and approaches that businesses use to survive and even thrive during an economic recession. This type of strategy is particularly important during a recession because consumer spending tends to decrease, which can lead to reduced sales and revenue for businesses.
Businesses must observe their operations and identify areas where they can reduce costs, streamline processes, and improve efficiency to create a recession marketing strategy. They may also need to adjust their marketing strategies to reach cost-conscious consumers and differentiate from competitors.
Some common recession strategies include focusing on value, offering promotions and discounts, investing in digital marketing, targeting niche markets, and adjusting pricing and product offerings.
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