Recession. It’s a big, scary, anxiety-inducing word for a lot of people. Governments will scramble to avoid even mentioning the word. Newspapers flash it in headlines with a similar attitude to announcements of an imminent apocalypse. And the knee jerk reaction in the business world is almost uniformly the same: pull back spend.
The “batten down the hatches” viewpoint is hardly new. Reducing expenses is a pretty fundamental ingredient of recession planning to stop businesses from going completely belly-up in a downturn, but what I admit I’ve never quite fully grasped is the idea that the first thing to go is all – or nearly all – of your marketing budget. After all, who needs to stay front of mind to customers in a period of reduced spending? Oh… wait.
At first glance the idea seems sound enough. Fewer people are spending money, so there’s no need for your marketing to really “reach” as many eyeballs, so let’s cut all that and put it into the safety pot until the storm blows over. This overlooks one very key aspect of marketing, though, which is the need to stay in the spotlight. Customers have short memories when it comes to advertising. Vanish from their field of view for even a week or two and they may struggle to recall you. Vanish for a month or more and you might as well have buried your brand in a peat bog. How’s that going to help your longevity once the dust settles and the cash starts flowing again?
There’s an opportunity here… no, really!
It’s a recession, right? Scary word, as mentioned. Perfectly natural to worry, maybe even outright panic, and shift gears into Survival Mode. But as well as risk (and no shortage of it, let’s be both honest and realistic), an economic downturn can actually be a huge opportunity… if you play it right.
Are your audience and all potential customers going to be spending less money? Well, yeah. Duh. Is the Market, that so-often ambiguous blob of economic doings that governs all things capitalist, going to struggle? Almost certainly. But with the right approach, you can actually boost your brand image and reputation with customers and wind up with a great setup to seize more market share once things settle back down. Investing in the right areas – loyalty and innovation being two of the biggest – and you can actually come out with a significant lead on your competitors.
Har har… a marketer doesn’t want you to stop investing in marketing. What a shocker, eh? But don’t just take it from me – there’s an easy object lesson probably sitting in your kitchen cupboard. Ever heard of a little brand called Kellogs? Back in the day they weren’t the huge name they used to be. In fact they were toe-to-toe with another cereal brand called Post… until they invested in an innovative new product called Rice Krispies during the Great Depression, rather than focusing on consolidation and cost cutting like their competitors. The new product was a hit and now who the heck has even heard of Post?
Something more modern? How about a tiddly little company called Salesforce, that leaned into the idea of platform-as-a-service during the 2008 financial crisis, and are now worth an estimated $150 billion with some change?
Time to do some fine tuning
As well as looking for opportunities to innovate and expand market share in the long run, a downturn is a great time to do some real fine-tuning on your business. What do you really need, and what can you do without – genuinely do without – that won’t tank your growth or your longevity? Maybe the marketing team can take some of this if the data points to ways to trim things down to be leaner and meaner without losing tons of effectiveness, but don’t assume there aren’t other departments that couldn’t stand a trim, either. Where’s the waste? What can you optimise?
Talk to suppliers about contract values – they might be willing to do a (temporary) rate drop if it helps retain you as a customer in the longer term. Marketing platforms in particular are notorious for this, so don’t be afraid to reach out and ask (worst they can say is no)! Taking advantage of the market to make it work in your favour can help give your business the edge it needs to both survive and thrive. Don’t reflexively start mass layoffs and salary drops, either; you’ll risk losing your best people just as you’re going to need them more than ever. Yes, you may well need to trim your costs down, but the term here is trim – that’s a scalpel, folks, not a machete.
Let’s get innovating
Creativity and innovation – in both marketing and product – are inevitably the winning formulae when it comes to coming out of a recession even stronger. Don’t let the status quo stand; choosing and spending behaviours change drastically during times of financial trouble, so your existing marketing mix and channel approach probably won’t hold up. Get creative, get bold, and find something that’ll both put and keep you at the front of people’s minds. Show personality. Show (genuine) humanity. The minds and hearts you win now will spend with you in the future even if they can’t afford to right now.
Even better, get smarter with your core offering itself. Lots of startups find unexpected growth surges during recessions as they offer more cost-effective solutions than the incumbent tried-and-trues when people are trying to shave costs. Keep competitors at bay by offering more budget-friendly versions of your own lines that allow you to leverage – and retain – brand loyalty while also showing compassion to the bank balances of your customers. They’ll remember that you gave them the option. And they’ll be back when their wallets are healthier.
You snooze… you’ll lose
A recession is generally bad news for everyone. That’s hard to ignore, and impossible to sugar-coat. But while there are no guarantees, in times of financial turbulence least of all, there are opportunities out there if you plan ahead and make sure you have two critical things in your back pocket at all times:
- the data that tells you precisely what you can and can’t afford to stop spending on
- the creativity to lean into a turbulent market and make it your own
Sure, you might save more than a few bucks by snoozing your whole marketing department until the sun comes out again… but how much near-irretrievable ground will you have lost if you bet that all your competitors will do the same, and they don’t?
In short, don’t be a Post. Be a Kelloggs.