Updated: Oct 13, 2022
As you start to plan your marketing for the final part of 2022 and into 2023, the consistent theme you hear is that we’re headed for an economic downturn. Fears of a recession and slowed spending have marketers planning for the worst. But the steps you take now can not only influence how you weather the storm but also dictate how well you’ll recover.
So, how should your team be preparing? Here’s a quick playbook designed to help you maximize wins, even during hard times.
The best offense is a good defense.
While the traditional methodology is to circle the wagons and slash marketing budgets, data indicates that’s not the best play. In fact, a 1999 study tracking the impact of advertising during and after a recession at a thousand U.S. and European firms showed the opposite might be true. In that study, the firms were divided into three groups: those that decreased, those that maintained, and those that increased their marketing spend. The results showed that, as the economy recovered, companies that decreased their spending lost 0.8% market share, while those that maintained saw an increase of 0.6%. Most importantly, those companies that invested in their advertising reaped the biggest reward, with an increase of 4.3% market share.
There are probably several different factors that influenced the outcome of that study, but it seems clear that cutting budgets and going on the defensive doesn’t work. By taking an offensive position and continuing to engage your audience, you not only stay top of mind, but you can also help reinforce consumer confidence in your brand — which, ultimately, can lead to a faster, more profitable recovery.
Give the fans what they want.
Growing your customer base is an essential part of every marketing plan. But during an economic downturn, don’t lose sight of your current customers.
Make sure you’re allocating budget to retention and not just to acquisition. This will not only help secure your place in the consumers’ minds, but it will also be significantly less expensive and much more profitable. Research done by Frederick Reichheld of Bain & Company shows that increasing customer retention by 5% can increase profits by 25% to 95% — so, make sure you’re investing in relationship marketing now. Whether it’s via email, direct mail, social, or virtually any other platform, the more you can do to secure loyalty in 2022, the better off you’ll be in 2023 and beyond.
Focus on the plays that guarantee gains.
In football they’re known as short yardage plays — plays that keep the ball moving and keep your team on the field. In marketing, this means implementing tactics that deliver measurable ROI.
In times of economic stress, the ability to show results for your marketing spend is more critical than ever, so consider reallocating budget to direct tactics. Utilizing direct mail, digital, and DRTV to engage your audience and inspire action will not only help drive sales with consumers, but it will also justify your budgets with leadership.
Set your line-up to maximize impact not salary cap.
If you’ve been thinking about working with a smaller agency, one with which your brand can be the star, now’s a great time to start those conversations. Less overhead and no conglomerate earnings quotas can help you get even more from your budget. Plus, with fewer layers and politics at play, your agency partner can quickly react to shifts in the market as the economy evolves.
Play to the buzzer.
Experts say that the average length of a recession is 11 to 18 months. This means that, if your customers have a longer decision cycle before purchasing your product, you should continue to marinate them throughout the recession. Sure, you’ll need to adjust your messaging to make sure you’re not being tone-deaf to their concerns and economic worries, but by not engaging customers during a recession, you’ll be left with more ground to cover later, and you’ll wind up playing catch-up with your competitors.
When it comes to preparing your brand for a recession or economic downturn, there are many more factors to consider than what we’ve outlined above, but these five plays are a great place to start to ensure that you, your team, and your brand continue to find ways to win in the coming months.
Interested in learning more, or discussing how we can help you develop unique plays to solve your marketing challenges? Schedule a conversation today.