Though economic experts insist we’re not officially in a recession, it’s safe to say that the global economy is in a state of flux. Inflation is rising, interest rates are increasing, and stock markets are volatile. These factors are creating uncertainty for businesses of all sizes.
– A well-executed marketing plan can help you to stay top-of-mind with your target audience, build customer loyalty, and generate leads and sales – even when the economy is soft.
The Effects of an Uncertain Economy on Businesses
When consumers have less money to spend, they are naturally more likely to cut back on discretionary purchases. That’s a given. This can lead to a decline in sales, especially for those who sell discretionary products or services – something we’re already starting to see as of late. In addition, an economic downturn can lead to increased competition. As businesses struggle to stay afloat, they may be more likely to cut prices or offer discounts. This can make it difficult for businesses to differentiate themselves from their competitors. If your business falls into this category, a tightly-defined marketing strategy is essential during this time – and we can help.
Common Mistakes Businesses Make During a Downturn
When faced with soft economic times, many businesses make the mistake of cutting back on their marketing budget. In fact, marketing spending, including on services and employees, is often the first line item to get cut. However, this is actually the worst time to do so. Marketing is essential for businesses to stay top-of-mind with their target audience and generate leads and sales. Plus, history has proven businesses that invested in their marketing during past economic recessions have set the stage for greater success on the other side.
To quote VentureBeat:
Analysis by Kantar Millward Brown during the 2008 financial crisis found that 60% of the brands that “turned off the lights” to marketing by stopping all TV ad spend for six months saw brand use decrease 24%, and brand image decrease 28%.
A McGraw-Hill Research study looking at 600 companies from 1980 to 1985 found that businesses that chose to maintain or raise their level of marketing during the recession had significantly higher sales after the economy recovered. Specifically, companies that decided to advertise aggressively during the slowdown had sales 256% higher than those that stopped.
As we now face some economic headwinds, we will surely see a repeat of these statistics once we look back on this period.
The Benefits of Investing in Marketing During an Economic Downturn
By investing in marketing during an economic downturn, you’re likely to stay top-of-mind with your target audience, build customer loyalty, and drive leads and sales. This will help you to weather the storm and come out stronger on the other side.
Here are a few specific ways that taking these steps can position your business for success once times are good again:
- Increased brand awareness and recognition: Investing in your business’s marketing will keep your brand at the forefront when consumers are ready to start spending again. Consistency is key – pausing your strategy will just make it harder to right the ship and regain momentum.
- Build customer trust and loyalty: By investing in marketing, you foster customer trust and loyalty. This will make customers more likely to continue doing business with you once the economy improves. Your messaging and strategy may need to shift, but again, it’s all about consistency and repetition.
- Gain a competitive advantage: The businesses who let their foot off the gas pedal during an economic downturn will face headwinds getting back up to speed in the sunnier days ahead. Use this to your advantage and explore ways to grow your audience and gain new leads while competitors have scaled back their strategies.
- Generate leads and sales: Get creative with your strategy. Offer promotions and sales to generate interest and home in on what makes your product or service special and convince your audience why they need what you offer. You’ll reap loyalty and affinity even among customers who may be cutting back on non-essentials at the moment.
Creative Ways to Invest in Marketing Without Breaking the Bank
There are many creative ways to invest in marketing without spending a fortune – with or without an agency. Some low-cost or even free marketing tactics you can use include being more present on social media, beefing up your website’s blog content, or starting an email newsletter using customer opt-ins. Collaborating with other businesses, providing customer incentives and promotions, and hosting events or webinars are great ways to boost your brand’s visibility and attract new customers.
The global economy is in a state of flux, but your business can still thrive during an economic downturn if you take the right steps – and do so sooner than later. By investing in marketing, you’ll stay top-of-mind with your target audience, build customer loyalty, and ultimately generate more leads and sales.
In summary, here’s what you can do to get started today:
- Be proactive: Don’t wait for the economy to improve before you start investing in marketing.
- Be creative: There are many ways to market your business on a budget.
- Be focused: Target your marketing efforts to your specific target audience.
- Be patient: Building a strong brand and generating leads and sales takes time – in good times and in bad.
If you take these steps, you will be well-positioned to weather any economic storm and come out stronger and better positioned than ever on the other side. If we can help you examine your current strategy and give any recommendations, or if you’re looking for a partner to help you start that investment in your marketing, please contact us for a complimentary assessment.