While economists disagree on whether the economy is heading for a full recession or if we’re just entering a downturn, the effects are being felt in the business community. Many companies turn to their marketing budgets as a place to cut and save money—however, during times of economic stress, it’s more important than ever to stay engaged with your loyal customers. History has shown that brands who continue to invest in marketing and innovation during recessions and downturns are the ones who come out ahead when the economy picks back up.
If you’re feeling unsure about how to proceed with your marketing strategy and spend in this time of economic uncertainty, you’re not alone. Here are four of our best tips for how brands can successfully engage with their consumers and stay at the top of their game throughout an economic downturn.
Make your message match the moment
Consumers are feeling the pinch of the downturn, so you don’t want your messaging to appear tone-deaf to the economy. Remember that many people are going to be price conscious during times like these, so it can be a good strategy to focus on value-based messaging. In other words, position your product or service as a good value to consumers—something that will last a long time, that provides benefits they couldn’t get with a competitor, and so on—so they feel more comfortable and confident spending with you.
If it suits you brand, you could even level with customers and speak empathetically about the economic situation. By addressing the challenges in the economy, you can build trust and a more authentic, personalized experience with customers.
Continue advertising, but re-evaluate your channels
Recessions don’t last forever, so we don’t recommend drastically cutting your advertising budget if you can help it. In fact, according to Nielsen, 75% of recessions end within a year, and a full 30% only last two quarters. However, it is wise to evaluate how you’re spending your budget and making sure you’re putting marketing dollars in the right places. Think critically about which marketing efforts and advertising channels bring the best ROI and keep investing in those. Consider reallocating spend from lower ROI channels to those with better returns. And, if you do need to cut budget, you can set aside tactics with a low return to save costs. Remember, you can always return to more diverse tactics when the economy picks up, but for now, your best bet is to stick with (or even double down on) what works.
Focus on your current, loyal customer base
Your current customers are much more likely to continue to spend with you than a new customer is. For this reason, it’s good to focus on your most loyal customers when times get tough. Leverage your owned channels like your email list and loyalty programs to continue to delight your existing customers and fans.
If you don’t currently have a loyalty program, this could be a great time to invest in one. Programs like this help to incentivize repeat purchases and help customers feel like they are connected to the brand, which increases the perceived value for them. Ad Age found that, “customers who engage in loyalty programs and self-identify as fans of a brand are also less price sensitive and will spend a larger share of wallet with that brand,” even in a downturn.
While an uncertain economy may make you want to turn and run away from innovation, you want to set your business up to make a big splash during the economic upswing. This includes new products and technological innovations. Bringing new products to market helps keep customers enthusiastic about your brand. For example, Amazon released Kindle just before the 2008 economic crisis, yet they subsequently saw their market share grow and saw a 68% increase in profits year over year.
Even if you aren’t bringing new technology to market, innovations could help keep you afloat during tough times. One such example is experimenting with new pricing or service structures to maximize your best-value offering and bring customers in.
All in all, the refrain to remember is that recessions don’t last forever, and it’s important that your marketing department continues to push business forward so that you’re well positioned to boom when the economy does, too.
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