As a business owner or marketing manager, your first inclination during an economic slowdown might be to slash your marketing budget in anticipation of lower revenues. When the US stock market tanked back in 2008 due to the financial crisis, overall ad spending also dropped by a whopping 13%. However, based on numerous studies businesses that reduce their marketing spend during a recessionary period are actually using the wrong approach.
In fact, most advertisers who maintained or even increased their ad spending during past recessions ended up with a larger market share and higher sales afterwards. To help ensure your business’ success moving forward, here are the best ways to maximize the impact of your marketing dollars while weathering a recession.
4 Reasons Not to Cut Your Marketing Budget
No matter what industry you compete in here are four reasons not to cut your marketing budget when the economy takes a turn for the worse:
- You will continue to project a brand message of corporate stability to your customers even during challenging economic times.
- When your competitors reduce their ad spending it lowers the amount of “noise” in your given market. You can then take advantage of that advertising lull by boldly launching a new brand or repositioning an existing one.
- It costs less to advertise during a recession, essentially creating a buyer’s market for advertisers.
- When marketers advertise less, their brand’s “share of mind” suffers. As consumers start to forget about certain brands their sales and market share decline. On the other hand, by running more ads against fewer competitors your brand’s “share of voice” will remain strong.
These 2 Advertisers Got it Right
According to a recent Forbes article, these two American companies had the right idea nearly a century apart about how to grow business during a recession:
Leading up to the Great Depression, Post had the highest share in the breakfast cereal market. Once the depression started, Post cut its marketing budget significantly while their biggest rival Kellogg’s doubled theirs– mostly on radio ads. Kellogg’s even introduced a new cereal called Rice Krispies, which featured the now legendary “Snap, Crackle and Pop” ad campaign. As a result, Post’s market share dropped sharply as Kellogg’s profits rose by 30%.
A more recent recession marketing success story belongs to tech giant Amazon. During the Great Recession of 2008-09, Amazon ignored the slumping economy, kept advertising and continued to introduce innovative products like the Kindle. That bold strategy helped Amazon’s brand become firmly embedded in the minds of consumers – a trend that continues today.
Dive Deeper into Your Target Audience
During an economic downturn the Harvard Business Review identifies four categories of consumers that make up your target audience:
- Slam-on-the-brakes consumers. This segment contains the most vulnerable and financially hardest hit members of your audience.
- Pained-but-patient consumers. Although they cautiously reduce their spending, consumers in this group remain optimistic about the future.
- Comfortably well-off consumers. Those in this category continue to spend at pre-recession levels although they are slightly more selective about who they buy from.
- Live-for-today consumers. Members of this group carry on as usual with little concern about saving or spending money.
The HBR also points out that the average consumer prioritizes his or her consumption habits during a recession by sorting products and services into these categories:
- Essentials: Items that are necessary or perceived to be necessary for survival
- Treats: Indulgences whose immediate purchase is deemed to be justifiable
- Postponables: Needed or desired items that can reasonably be put off
- Expendables: Items perceived to be unnecessary or unjustifiable
Use these HBR guidelines to determine where your current target audience falls and then devise an effective recession marketing campaign that will resonate with those consumers.
Focus Your Marketing Budget on Existing Customers
Even though you’ll be targeting potential new customers with ads, your primary focus should still be on your existing customer base. In other words, you should always use recession marketing strategies that target the most loyal, valuable and satisfied customers you have.
As a result, those returning customers will repay you in the form of positive reviews and recommendations – especially if you can clearly show those happy customers how your business is helping them survive difficult times.
Best Forms of Advertising During an Economic Crisis
Years ago, radio, newspaper and TV were the most widely used forms of media advertising. And although those forms of advertising are still somewhat relevant, in today’s Internet-driven world digital marketing strategies like SEO, social media, email marketing, content marketing and Google Ads are now a more cost-effective, higher return-on-investment marketing spend alternative.
Digital marketing also comes with built-in targeting capabilities and measurables that other forms of advertising can’t deliver. Thanks to newer online resources fueled by AI-technologies it’s now easier for you to reach the target audience you want with meaningful ad campaigns, which ultimately leads to higher customer conversion rates even during an economic downturn.
Quantifying Results of Your Digital Marketing Strategy
To know if your digital recession marketing strategy is working, you’ll need to consistently monitor and analyze the results and then readjust your branding message accordingly. One way to quantify those results is by using a call tracking program like Google Analytics.
But if you don’t have a dedicated in-house specialist who knows how to combine that analytical data with sales information, you’ll have a hard time identifying the best performing marketing strategies. Having a qualified individual who can analyze real-time data will allow you to eliminate under-performing approaches from your marketing budget without seeing a corresponding dip in your branding or sales.
Recession Marketing Assistance for Legal Recruiters
As a legal recruiter the key to success during an economic recession lies in having a digital marketing strategy that’s up for the challenge. At the Legal Recruiter Directory, we provide legal recruiting agencies and law firms with digital marketing solutions that are designed to help them weather the storm through good economic markets and bad.
As market forces continue to fluctuate, the LRD remains diligent in its pursuit of helping legal recruiters connect talented active or passive attorney candidates with some of the most prestigious corporations and law firms in the US so that all parties benefit. Learn more about the Legal Recruiter Directory today.