Here’s how to market during a recession
20 July 2023
Here’s how to market during a recession
During economic uncertainty, we often aim to shore up what we have and protect our business. However, this isn’t necessarily the best avenue to ensure success.
French Absurdist philosopher Albert Camus once said, “everything I know about morality and obligations, I owe to football”. A similar takeaway can be made here. Anyone who’s watched football (we’re not calling it soccer here) will know that some teams take a one goal lead and then sit back and defend their lead. While this sounds like a smart move, as the leading team focusses all their efforts on defending, minimising any holes in their defence that may appear as their players push forward, it also invites pressure and allows the opposing team to attack.
Failing to market during a recession is like taking a one goal lead in football and sitting back on defence. You’re inviting pressure onto your team and allowing your competitors to catch up to you and even overtake you.
In this blog we’ll dive into the importance of marketing and advertising during a recession. Using the key mistakes from the past and the latest strategy, we’ll show you why economic uncertainty can be a great advantage for your business.
The urge to defend
During uncertain economic times, businesses may often find themselves wondering whether or not they can afford to maintain their advertising and marketing strategies. However, this isn’t asking the right question.
The right question to ask yourself is - can I afford to stop marketing or advertising? During economic downturns, businesses need to save money and make budget cuts to survive, but it’s important to make these cuts wisely. While paying salaries, operation costs, and maintaining contacts should be the first priority, there should always be room for marketing.
While you may feel the urge to make cuts and defend, it is actually the perfect time to pivot and grow your business.
Don’t (corn) flake out on your marketing
The 1920s were a roaring great time, but then the Depression hit and things got tough. Businesses and individuals across the world were feeling the crunch - especially Kellogg and Post.
As the 1920s closed, Kellogg and Post were fighting for the top spot in the cereal wars but it was the Depression that crowned a victor (spoiler alert: it was Kellogg's). Post cut back on their advertising budgets, while Kellogg's doubled their advertising budgets and pushed their new cereal - Rice Krispies - hard onto the market. While the economy was still struggling in 1933, Kellogg's had boosted their profits by around thirty percent.
The moral of this story is that economic downturns free up the market, allowing businesses to fill this marketing void, attract new customers and even take customers from their competitors.
In other words, if your competitor is cutting their marketing budget to save on costs, this means you are able to increase your market share and fill the void left by their absence.
The Great Depression isn’t the only case of businesses growing during a recession. After the credit crisis of the late 2000s, research found that while businesses that cut their marketing budgets survived the recession, they also experienced a negative slump after the downturn. On the other hand, businesses that invested in their marketing grew after the crisis and experienced an average growth in market share of 1.3%.
Businesses that grew following a recession generally had the following three things in common:
- They took early action
- They had a long-term vision
- They aimed for growth, not savings
How to increase sales during a recession?
Simply throwing more money at the problem isn’t going to fix it. You need the investment, but you also need to pivot with care and approach the problem holistically. If you’re going to grow your business, you’ll have to ask yourself - how or what do consumers buy during a recession?
Consider your messaging
During periods of economic instability, consumer behaviour changes just as much as your marketing budgets.
Consumers are now more anxious and apprehensive about their purchase decisions. They’re also more likely to factor cost into account.
You’ll need to re-examine and change your messaging and strategy to reach out and engage these consumers. Does your current messaging need to change to resonate with the current climate and connect with your audience? Further, does your messaging highlight why your product or service is worth it in this climate?
Loyalty programs are a great way to enhance a connection between your brand and customers, especially during an economic downturn.
A reward system is a great way to build customer loyalty and attract new customers. Offering value and convenience is a big part of your recession marketing strategy, helping to attract new customers and keep the existing customers coming back.
Be proactive, not reactive
The main takeaway from the COVID-19 pandemic is that businesses need to be flexible. They need to be proactive and able to pivot in a market that can change overnight. Adapt your business model and keep yourself open to new sources of revenue.
Your customer needs will change, so will your business. Another lesson from history here is Kodak. In the 90s, Kodak were market leaders in the camera industry. However, then the digital camera came and Kodak didn’t invest as film and paper was super profitable for them at the time. By failing to adapt to new technology, Kodak fell by the wayside in the digital revolution.
Now is the perfect moment to supercharge your digital strategy and connect with your customers on a whole new level, elevating your brand awareness to dazzling heights. Take a closer look at your existing digital initiatives and harness the power of your social media presence to captivate your audience with your revamped messaging. It's time to make a bold statement and leave a lasting impression in the digital realm!
Economic downturns may feel like the time to make cutbacks to marketing, but in actual fact it can damage your business’ future and allow your competitors to overtake your current market position.
Instead of cutting back on marketing and advertising, consider how you’re using those budgets and invest in data-driven marketing to get the results your business wants, take advantage of the marketing void and overtake your competitors.
Don’t sit back and defend your market share from competitors. Keep the pressure on and ensure that you are finding new avenues for growth and opportunity.
Need marketing support?
At Refuel Creative, we have the marketing tools, experience, and creativity your business needs to get ahead of the competition.
Learn more about how we helped our clients find success and smash their marketing goals below.