Current financial forecasts are all over the map. While some economists and CEOs feel a recession is imminent, others think it’s unlikely. Then there are those who warn of a “growth slowdown.” These financial leaders believe the economic growth rate will slow, though it will remain positive.
Ultimately, we don’t know what the financial future holds. However, as we learned during the COVID-19 pandemic, there are strategies you can use to ride through the uncertainty. In that vein, I want to talk about the importance of marketing during a recession and give you some tips to navigate the changing economic landscape.
4 Reasons Marketing in a Recession Makes Sense
Marketing keeps you connected with your target audience, which is even more crucial when shifting economic conditions impact buying behavior. Changing times call for refreshed messaging — whether you want to reach B2B or B2C consumers.
If marketing investments feel like a luxury or, worse, a risk during a recession, remember these four things.
1. Marketing Drives Sales
Yes, I’m stating the obvious.
Too often, marketing budgets are the first on the chopping block when economic worry sets in. But the logic of this fear-based mindset just doesn’t parse. There’s no more critical time to reposition your services and products to market changes, continue building awareness, and generate leads.
According to a literature review of research about marketing during a recession, seven studies found that preserving campaign budgets could increase sales during and after a recession. Plus, “firms that increased advertising during a recession experienced higher sales, market share, or earnings during or after the recession.”
Most notably, one study concludes companies that refused to reduce ad spend during the 1981-82 recession increased sales by almost 340% within four years after the economy recovered. Other studies strike a similar chord — if you fail to feed your sales pipeline, your revenue generation will lag during the economic recovery.
2. Continued Marketing Activities Signal Stability
Scrambling to pull advertising and cut back on marketing activities sends the message that your company is worried about its financial future. This alone can impact sales, financial forecasts, and capital fundraising. With today’s hyperconnected news cycle, radical changes to your marketing plan may be taken as a sign that something is wrong with your business and negatively impact consumer confidence.
3. Stand Out From the Competition
If your competitors have abandoned their marketing campaigns in the interest of short-term savings, now is your time to shine.
By maintaining (or increasing) your marketing spend, you position your business to leverage the white space competitors leave unclaimed when they recede into the background during an economic downturn. This is your chance to claim a bigger piece of market share.
4. Prepare for Economic Recovery
A recession won’t last forever, don’t sacrifice future earnings for the sake of saving a buck today. Slashed marketing budgets and canceled advertising campaigns may make it harder to “return to normal” once the recession has passed.
Marketing during a recession builds resilience, allowing for a quicker bounce-back post-recession. While your competitors are still resuscitating dormant marketing plans, you’ll have increased your momentum and be well on your way to capturing a larger portion of the available market share.
Make the Case for Maintaining Your Marketing Budget
If you’re seeing economic indicators of a recession or industry-wide lull, prepare to justify your marketing budget and share your proactive marketing plans with key stakeholders.
Focus on High-ROI Activities
While cost-cutting may be front-of-mind for decision-makers, present a case for saving your budget by offering a plan that doubles down on high-ROI activities. Focus your strategy on leveraging the opportunities rather than mitigating the liabilities in a challenging market.
For example, a search-optimized website can increase traffic and conversions, which are instrumental for revenue growth. I’ve seen SEO campaigns exponentially increase organic search traffic to a customer’s website, pulling the company back from the brink of disaster.
How a Family-Run Travel Business Came Back Strong Post-COVID
Just before the pandemic, we partnered with Immanuel Tours to help boost their search visibility. When global lockdowns paralyzed the travel industry, we would have understood if they opted to put their campaign on hold. Instead, they doubled down on their SEO efforts, creating content specifically targeted to address traveler uncertainty during this time. Immanuel Tour’s organic traffic more than doubled during the first year of the pandemic, and they captured valuable keywords that continue to bring high-quality traffic to their site.
This story demonstrates an important point. While SEO activities can yield long-term results, there’s no way to “lock in” rank. If your top-ranking competitors cut their SEO budget, you have a critical opportunity to capture new customers in a less competitive environment.
Learn more about how SEO can amplify your other marketing activities and pinpoint how much to spend on SEO.
Budget Cuts? Make Data-Driven Decisions
Creating more revenue with a smaller budget is harder, though it’s not impossible. If you must cut your marketing budget, trim it with the help of data. Adjust your marketing spend based on ROI.
When it comes to digital marketing, for example, you may find that SEO has a better click-through rate and higher ROI than PPC campaigns. Scaling back your advertising spend to reinvest it in SEO could yield better results in the long and short term.
Marketing in a Recession: How To Do It Right
If the National Bureau of Economic Research determines the US is in a recession, or if your business is experiencing lagging sales that may indicate an economic slowdown, you’ll want to revisit your marketing strategies to make sure they remain as effective as possible.
Avoid Knee-Jerk Reactions
I get it, even talk of recessions can be scary. To prevail during shifting economic conditions, it’s crucial to maintain a clear head. Don’t be swayed by knee-jerk reactions and calls to immediately slash marketing spending.
Thorough market analysis and close examination of ROI should precede any adjustments you make to your marketing plans.
Gutting your marketing strategy because of short-term conditions will have a long-term impact. In the short term, marketing cuts may allow your business to shift funds to other departments or just reduce spending in general. However, the cost of reducing marketing activities may have a larger impact on future viability than the “savings” are worth.
It’s also important to note that the economic realities of today are different from the most recent recession in 2020. The same goes for the Great Recession. Each recession is unique. While it’s always valuable to look to past events and how successful companies managed them, the factors impacting the economy and how people react to them will be different.
Run New Market Research
Changing economic conditions may or may not affect your target audience. To determine whether their purchasing behavior has changed and how else they may be impacted, you need to conduct new market research.
You want to identify:
- Whether your target audience has been affected by the current economic climate.
- How they’re reacting. (Are they cutting back on spending, or have their spending habits not been impacted?)
- What type of encouragement they need to make a purchase with you.
This information will help you amend your current marketing strategy or formulate a new one so you can meet potential customers where they are.
Recalibrate Your Goals
Once you have your latest research in hand, it’s time to modify your goals or create additional goals that align with your findings.
Depending on your industry, you may discover that focusing on customer retention over new customer acquisition will provide the greatest benefit during an economic recession. Or perhaps your market research indicates there’s no need to change your approach. Be open and let the research guide your market strategy, not the other way around.
You may also find opportunities to adjust your product or service offerings to provide alternatives that entice potential customers who are looking for a lower price point or an introductory offer. If so, speak to other stakeholders about the viability of this approach and whether it’s appropriate for your business model.
Align Your Marketing Strategy With Your Latest Goals
Once you’ve identified your new marketing goals, you can begin to thoughtfully adjust your marketing strategy. This could mean shifting your current campaigns to meet your needs or creating new campaigns centered around new objectives. If this necessitates shifting ad spend, you can do so strategically by identifying the ROI of your different marketing channels and reallocating the budget of those with the lowest ROI to better-performing campaigns.
Since budget is a concern, you can also identify opportunities to modify existing campaigns rather than creating entirely new ones to reduce additional creative expenses.
Does SEO Work During a Recession?
Yes, SEO is a worthwhile investment during a recession. Since SEO works by funneling organic traffic from relevant searches to your website, you’ll still benefit from a robust search engine optimization strategy regardless of the economic climate.
When you optimize your website content around particular keywords and follow technical SEO best practices, you increase your chances of ranking well in search results. Since Google page rank has been shown to correlate with organic traffic, climbing up the search engine results page (SERP) will generally lead to more traffic to your site.
Thinking of scaling back marketing activities and opting for a lean SEO strategy? Here’s what you need to know.
Seize the Opportunity to Rank
Not only will SEO work during a recession, but focusing on search engine optimization strategies during an economic downturn may help you snap up keywords your competitors have been dominating.
If you continue creating SEO content and participating in link-building activities while others cut back, you can usurp their keyword positions. Competitors who “stop” SEO create a white space that businesses who double down on SEO can take advantage of. Essentially, you can reap the benefits of short-term gains with long-term reach. Then, when economic indicators turn around — which they’ll inevitably do — your competitors will be in the unenviable position of needing to catch up to you.
Nervous About the Future? Budget for Long-Term Success
Need help determining how much you should spend on SEO? Want to reallocate some of your budget to support your SEO goals? Download our How to Budget for SEO ebook to support your decision-making process.
How to Budget for SEO
Unleash your true search potential by planning for SEO in your marketing budget. Download our free guide to learn how to budget for SEO:
Experience the Power of Partnership
Economic events can have lasting effects on consumer behavior, creating more opportunities for marketers bold enough to recognize and act on them. Step forward into the whitespace created by competitor cutbacks and maximize your SEO potential now to yield compounding results that will pay dividends in the future.
At Victorious, we can help you identify high-impact opportunities so you can focus on the SEO strategies that will give you the highest return on your investment. Schedule a free SEO consultation today. Let’s talk about your goals.
