3 Rules + 3 Strategies = 6 Helpful Notes For Marketing in a Recession
- Customer behavior has changed dramatically — and will likely stay that way. Make sure you know how your customers have changed.
- Don’t stop believing — or marketing
- Grab your lab coat and focus on the science of marketing: analytics, ROI and constant experimentation
- Successful marketing campaigns come from evoking strong emotions
It only took about six weeks for the world to become an alternate universe.
COVID-19 pushed the country into lockdown, infected more than 2 million people, and killed 115,000 as of early June. The public health crisis brought with it an economic tsunami caused the United States GDP to drop 5% in the first quarter, which pushed the unemployment rate up to a spike of 14.7% in April.
The world — and our behavior — has changed dramatically as a result of those weeks in the spring. As lockdowns start to fade, it’s clear that there’s not going to be a magic moment where we all resume our lives like nothing has happened. We’re looking at an entirely new normal.
While economists debate whether this recession will be V-shaped (sharp drop, rapid recovery) or L-shaped (dramatic drop, drawn-out recovery), it’s time to adjust your business, and by extension, your marketing strategy to the new normal.
The right marketing strategy can cushion the economic blow to your business and increase your odds of a V-shaped recovery — even if the larger economy looks more like an L.
3 Rules For Marketing in a Recession
The first rule of marketing in a recession is that you can’t stop. If you do, it’s to your own peril. Businesses that pull back on ad spend during a recession see sales tumble 20-30 percent over the span of two years. To steal an ancient cliche, turning off your marketing is a prime example of being penny wise and pound foolish.
Not only will you lose sales, but you’ll lose valuable market share you may never regain. The tale of Moxie and Coke is a classic cautionary tale — and we wrote about it at-length if you’re curious.
The second rule of marketing during a recession is understanding how your customers’ habits have changed. During the COVID-19 lockdowns, most industries had to figure out how to thrive online or go dark. As a result, online grocery shopping surged, real estate tours turned virtual, and Hollywood films went straight to Netflix — totally bypassing traditional cinemas, as noted in this McKinsey report.
Harvard Business Review wrote a fantastic in-depth piece that breaks down how consumer behavior changes during a recession. The tl;dr version is that customers tend to fall into four main groups that change their spending in different, predictable ways during a downturn. Understanding where your customers lie is the first, critical part of creating campaigns that speak to their circumstances.
The third thing to remember about marketing during a recession is that it’s not all gloom and doom. Sure, it’s scary. But the unknown is also filled with opportunities.
Take Amazon, for example. During the last economic crisis, Jeff Bezos and co. grew sales by 28% in the middle of the worst economy since the Great Depression. How did they do it? Innovation and experimentation.
The company introduced the Kindle during the 2007 holiday season, and went all-in on the e-reader as a way to grow market share. Two years later, e-books outsold hard copies for the first time ever. And, as this Forbes piece points out, consumer sentiment toward Amazon soared. Cash-conscious customers believed Amazon to be an innovative company because they introduced a cheaper alternative to the books of yore.
If you’re not ready to build the next Amazon, you could focus on innovation within your existing systems. We wrote a whole piece on a few ideas here.
The takeaway for you is to focus your marketing efforts in one major area: Maintaining your market share and brand awareness to stay top-of-mind with your customers. Here are a few tips for how to do it:
3 Strategies for Marketing Through a Recession
1. Measure Everything and Know the ROI of Your Marketing Efforts
We wouldn’t be defending marketing (and marketers) if we didn’t have a damn good reason. But we’ll do it because too many business owners see marketing as an expense, instead of an investment during a downturn.
Marketing is an art and a science. If you haven’t paid much attention to the science part of marketing, grab your lab coat and pull out the beakers. Just like the science experiments you did in school, keeping track of your marketing means you need to track everything.
Start measuring the result of your efforts by tracking three major areas:
- Web traffic and source breakdown - How many people come to your website each month? Do they come from organic search? Social media? Email marketing?
- Conversion rate - Of those people who visit your website, how many people raise their hand to hear from you again? And where do those hand-raisers come from?
- Customer rate - How many of those who raise their hands actually purchase from you?
If you can answer these questions, you’ll be able to pinpoint what’s working and what isn’t, so you can follow the scientific method, repeat your experiments and walk away with a solid theory.
We wish we didn’t have to add this next line, but it’s all too common: If you’re working with a marketing partner, they should be providing clear reports that give you visibility into all of these factors and more, so you know how your dollars are being spent.
2. Be Strategic With Your Marketing Budget
Now that you’re measuring everything and you know what’s working, it’s time to pull the levers to make more money. In our marketing lab, this is the part where we pull out the Bunsen burner and have fun playing with fire.
Your ultimate mission is to increase your conversion rate. To do that, there’s “only” one thing you have to do: follow the money.
First, look at the data to determine how your audience’s behavior has changed in the past few months and use these findings to focus on your strongest campaigns — or know when to pivot and create a new one.
For example, if sales for most of your products are down — except for one shining star, let that be your guide. Focus your time promoting the product that’s doing well, and consider using that data to roll the dice and try something new.
It’s the same with marketing tactics. Again, follow the money. If you notice that customers who find you through organic search are spending 3x the amount of those who come from social, consider ramping up your SEO efforts and pulling back on social.
Rinse and repeat with ad spend. If customers who click on your Instagram ads are spending twice as much as those who come from Facebook, the path is obvious. Dial back on Facebook and double down on Instagram.
3. Focus on Your Audience for Long-Term Gain
Our last strategy is the most important: Your customers will tell you what they want. Focus on their needs and tailor your messaging to meet them where they are.
As you adjust your messaging to stand out from the noise, resist the opportunity to jump on the bandwagon of tying everything back to COVID-19 — unless there’s a clear tie. (Do as we say and not as we do 😏)
Stay true to your brand and focus on providing thoughtful, value-driven, evergreen content. Be authentic, don’t send hollow messaging, and let your voice shine through.
While we spent most of this article focused on the science of marketing, don’t leave out the art. Emotion is everything when it comes to messaging. As Adweek points out, building a profitable brand isn’t about offering discounts and promotions. It’s about building a strong emotional bond with your customers. In one analysis of 880 case studies, the World Advertising Research Center found that ad campaigns focused on evoking a strong emotion brought in more dollars than campaigns built around rational messages like sales, even when times are tough, as the Adweek article notes.
Your customer may not remember how much your product cost when they’re ready to buy, but they’ll remember how you made them feel. If you can follow in the footsteps of Coca Cola during the Great Depression and paint a picture that associates your product with happy memories, you’ll win every time.
Regardless of whether the COVID-19 recession looks like a V, L, or B, the American consumer’s behavior has changed. This shift is likely to outlast the economic effects — which means your marketing should, too.
The quick-and-dirty, tl;dr version of our advice is this:
- Focus on maintaining market share and brand awareness
- Measure everything and know your ROI
- Make strategic adjustments to your marketing mix
- Pay attention to your customers and remember that emotion is everything
And if you do these three things, your marketing budget will be a strategic investment — instead of an expense.
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