By Natalie Boyd
In every adversity, there is opportunity. The uncertainty of a recession and COVID-19–related market disruptions is undoubtedly daunting, but you can’t hide from it.
Here’s a nugget of truth that serves as good news: When a recession happens and causes everyone to panic and shrink their advertising budgets, your marketing voice naturally grows louder. Now is your moment to grab a bigger piece of the pie.
This is the secret of successful entrepreneurs like Sam Walton, founder of Walmart, who famously said of the 1990 recession: “I thought about it, and decided not to take part.” Brands like Amazon, Kellogg’s, Taco Bell, Target, and Toyota are increasing their marketing to drive brand awareness, thought leadership, and sales during these key moments when others are operating in damage control mode.
By taking bold, strategic steps now, you not only build a stronger brand that can withstand the current storm, but you also recession-proof your business to survive other dips down the road, enjoying sustained growth instead. That last bit is important, particularly when you consider that America has experienced some sort of recession every four years or so since 1900.
Here we take you through three approaches to recession advertising and marketing to help your company survive today and thrive in the future:
Advertising and Marketing During a Recession
1. Don’t Panic; Ease the Blow.
It’s only natural for your business-as-usual strategies to come to a screeching halt. Open your parachute and take time to assess the crisis from a reasonable, rational standpoint. Make the obvious cuts, but don’t rush ahead with sweeping across-the-board reductions just yet.
- Turn off irrelevant campaigns. When lockdown orders are in place and festivals and business leadership conferences get canceled, redirect those budgets to digital content. If you had a grand opening or a new product launch scheduled, you may consider delaying.
- Shift your brand messaging. Consumers look to brands to be reassuring voices during times of crisis. Step up to the challenge and use your elevated status to express empathy, understanding, compassion, and altruism. Small gestures pack a lot of power now.
- Create content around lower cost or legacy offerings. Depending on your industry, your core customers could be under considerable duress right now. Focus on selling essentials and economy options, rather than costly discretionary items.
- Cut where it makes sense. How can you afford a marketing budget increase? Reducing operating costs, narrowing distribution margins, reprioritizing core activities, closing down underperforming facilities, facilitating better trade agreements, and consolidating stores are all alternatives to slashing your marketing budget.
2. Provide More Value
Once you’ve completed damage control to protect your ability to remain in short-term business, you’ll want to strategically invest in more long-term ramp-up projects and position yourself as a true leader in your field.
- Understand your audience’s needs. Use all the data you have from social media, sales reports, loyalty programs, and web analytics to discover where you need to innovate. Consider how your company is uniquely poised to eliminate customer or client pain points. Get creative with delivery services, direct sales, subscriptions, and new formats. Remember, your customers are not sales figures; they are unique people with needs, emotions, and problems to overcome. Treating them with responsive empathy goes far.
- Put more money toward thoughtful content marketing. Thought leadership content provides some of the best returns on investment (ROI). Consider what advice, tips, guides, and information you can share to help people get through the recession. With more people at home spending hours consuming content on digital devices, thoughtful content is a particularly meaty investment.
- Boost your marketing ROI with affordable paid ads. As my colleague, McCoy pointed out, the average Facebook advertising cost per click dropped from 11 to nine cents from January to March, as fewer small businesses bought ads and bargain bin pricing emerged. When you factor the low cost with increased web traffic, paid media campaigns are delivering more bang for your buck than ever before.
- Use social channels to boost PR. Facebook, Twitter, Instagram, and TikTok have become pillars of modern communication. Use these platforms to share your brand’s voice, run a contest, partner with a charity, show humanizing behind-the-scenes portraits of your personnel and operations, and encourage social shares.
3. Reposition for the Future
Once you’ve scrambled up to dry, stable ground, you’ll be well positioned for the economic recovery. As the downturn ends, it will be your time to shine, grow, and take market share from your competitors. Continue increasing your ad and marketing spending.
Here are some initial steps to take:
- Keep on measuring. The crisis won’t end overnight. Customer attitudes and behaviors may be impacted for years to come. For instance, you may have to consider making virtual events an ongoing part of your efforts.
- Diversify revenue streams. “Don’t put all your eggs in one basket,” as the saying goes. Look at ways of building alternative revenue streams for your business. Build up your digital products, try your hand at consulting, appeal to smaller and more intimate groups of people, or reach out to other global markets.
- Boost morale. Thriving businesses invest in their workers. You’ll be in a good position for the future if you’ve avoided massive layoffs thus far. Allowing some workers the freedom to work from home, shifting more meetings to email correspondence, implementing better medical care at work, reducing travel, and restructuring schedules could become permanent changes in the workforce after coronavirus—and that’s OK!
If you haven’t already, consider implementing free boxed lunch days, casual Fridays, group gardening, mental health breaks, and other morale-boosting activities. You’re likely to see rebounds in productivity and employee retention.
- Invest in growth. Progressive companies reexamine every aspect of their business models to reduce operating costs on a permanent basis, while investing in areas like research and development, marketing, content, and advanced machinery.
This is a time when our flexibility, innovation, and resilience are truly being tested. As competitors fall due to complacency, ineptitude, and rash reactions, your thoughtful approach will help you avoid common pitfalls and emerge prepared for growth. The next few months may not look as you had planned, but the future years are yours to envision.