Transition is currently the hot word. We are in a transition. The economy is in transition. Conflicting economic factors are leaving many in Board Rooms and on Wall Street hesitant. We have record low unemployment, but the highest inflation in decades. This transition economy is confusing and unstable. According to The Economist, three-quarters of CEOs of Fortune 500 companies expect growth to go negative before the end of 2023.
How can a company market its products successfully during a recession – that is the question before us. The marketing budget is usually the first to be reduced and we are already seeing consumers with less spending power. Which products will be more likely to sell to whom, and how do you get your advertising in front of the right buyers? The decisions you make now are going to have a huge impact during and after the recession.
The Economist stated the following encouraging words: “However, there are studies that date back centuries that actually show benefits to increase advertising during a recession. Companies that kept advertising actually increased sales and market share during the recession and most importantly, afterward!”
Their advice encourages targeting only your prospective customers and coming up with innovative marketing campaigns that will set your company apart from the competition. There will be less competition in the market and that is the time to shine. The consensus of experts seems to be – Increase, Target, and Aim for repeat buyers.
Increase spending on your Brand Recognition
- Increase spending! Increase the number of eyes on your brand. This will increase the likelihood of your target audience recognizing your brand! This tells customers that you are stable.
- Awareness marketing is encouraged even though it may not be directly tied to a purchase. Even though an OTT (Over-the-Top) ad might not drive purchases, it will make buyers aware of you and more likely to convert. Always take advantage of free marketing tools including social media and word-of-mouth advertising.
- Building and maintaining strong brands remains one of the best ways to reduce business risk. Begin by looking at your brands and products or services to determine which have poor survival prospects, which may suffer declining sales but can be stabilized, and which are likely to sell well during the recession and afterward.
Make your marketing more targeted
- During an economic downturn, marketing campaigns need to be more targeted. If you sponsor an event, normally you would want at least 40% of the attendees to be from your named account list. During a downturn, this number should be increased. Only attend events if your named accounts are attending that trade show.
- Value-based marketing means looking at how the value of your product or service will be a benefit to your customers and focusing your advertising on this value – your Unique Selling Position (USP). Put yourselves in the shoes of your buyers. There will be less disposable income available, so embrace the lifestyles and values to encourage buyers.
- Remember that consumers will seek out their favorite products and brands at reduced prices. Try bringing in customers with sales or bundles, then once they’re in your funnel, you can focus on repeat purchases.
- Develop strategies to measure the effectiveness of your marketing to determine which channels are truly delivering a return.
Aim for repeat purchases
- Don’t forget about your existing customers. It’s less expensive to sell to an existing customer than to bring in a new one, so focus on how you can use retargeting and well-timed emails to get customers to purchase from you again.
- Remember that loyal customers are the primary, enduring source of cash flow and organic growth. Marketing to your existing customers isn’t optional, it is essential to bring in revenues from these key customers.
- During a financial downturn it is particularly important to find ways to retain your existing customers by providing good after-sales service.
- Stay aware of the changing expectations of your customers. Customers will expect businesses to act in society’s best interests and they will factor in the company practices when making their choices.
This final bit of advice may be the key to staying alive in a downturn. When your customers or clients are suffering, they will be attracted to a company that recognizes their situation, shows it, and puts people before profit.
Photo credit: Merakist