Recessions shake up the way businesses should approach their marketing efforts, with every ebb of the economy producing a new crop of unexpected winners and losers. Some businesses seem to get everything right when it comes to marketing in a recession, remaining visible and profitable throughout. Others, who may have been acing their marketing efforts until a recession hit, make mistakes that leave them with a smaller share of their market or, worse, out of business altogether.
How does a recession affect marketing?
Recessions often lead to a decrease in marketing and advertising budgets as companies try to reduce their variable costs to weather the economic downturn. However, this is not a good approach for businesses that want to survive and thrive during a recession.
Marketing during a recession requires that businesses:
- double down on the fundamentals
- deliver reliable results
- keep an eye on the data to ensure that goals are being met
- capture a bigger chunk of market share as the recession eases
Is marketing recession-proof?
Marketing is recession-proof, because excellent marketing during a recession has the power to help businesses navigate a challenging time intact.
Especially today, with most people engaging with their screens for much of the day, marketing is sure to maintain an important function throughout the looming recession.
Mistake 1: Slashing the budget during recession marketing
Cutting back the budget is not going to help your business in the short or long run. It may be challenging but this lesson has been learned by businesses throughout history.
Even as recently as January and February of 2021, comparing Airbnb and VRBO illustrates this point well. While the overall economy may not have been in a recession, the travel industry effectively was, with much of the world under strict lockdowns and travel limitations. Airbnb responded by scaling back its advertising spending, while VRBO spent nearly 10 times as much despite being smaller. As a result, VRBO saw a recovery in bookings of over 60% by the middle of the year, while Airbnb saw a dip in bookings over the same period.
There are countless examples like this from previous recessions that illustrate an important truth. The businesses that maintain their marketing efforts are rewarded with more market share from their competitors when the economy recovers.
Mistake 2: Failing to define a recession marketing strategy
Businesses should maintain their marketing budget if they want to survive and thrive during an economic downturn, but that doesn’t mean marketing in a recession should look the exact same as marketing in rosier economic times.
Businesses should create a recession marketing strategy that responds to the moment. What this will look like will vary depending on the business. For many companies, it is appropriate to adjust messaging to acknowledge the challenges that their customers are facing.
For example, during times of economic growth, it might make the most sense to segment a business’s audience by lifestyle or demographics. A recession marketing strategy might instead segment based on how affected clients are by the current economic climate.
Mistake 3: Failing to define Key Performance Indicators (KPIs) for recession-proof marketing
When times are good and people are spending, sales come more easily. It can feel like all of the good fortune is the result of your marketing savvy or your amazing product or service, and while those are important, it’s also simply true that it’s easier to grow a business when spending is abundant.
When it comes to marketing in a recession, it’s more important than usual to have defined goals or KPIs for all aspects of a marketing campaign. From SEO to PPC advertising and any other components of your marketing campaigns, setting goals and keeping track of how you are performing against them can ensure that you are delivering the best possible results for the budget.
By having well-defined KPIs, it’s easier to cut the cord on strategies or campaigns that simply aren’t delivering results. Efforts can then be refocused on areas that will deliver results. In other words, defined goals can help you achieve marketing goals without letting the budget run away on expenses that aren’t ultimately growing the bottom line.
Mistake 4: Departing from the brand
Recession-proof marketing is essentially about returning to the fundamentals of marketing and implementing them well. This is exemplified by another mistake some brands make when marketing in a recession: forgetting their core brand principles.
While it is often appropriate to shift messaging to take into account the reality of a recession, this doesn’t mean that brands should depart from their core DNA. If their customers know them for being playful and humorous, that tone should be maintained even throughout a recession.
During a recession, it’s often the most loyal customers who keep a business going until conditions improve. The goal of any business marketing in a recession should be to reward those loyal customers with the brand experience they know and love.
Mistake 5: Failing to pivot to the right products or services when marketing in a recession
It goes without saying that during a recession, customers generally spend less. This means that an effective marketing strategy should take stock of a business’s products or services and identify the most recession-friendly offerings to promote more frequently and aggressively.
Usually, this will mean lower-cost products or services. However, price isn’t the only consideration. Profitability is also important, since the volume of conversions may not be as high during a recession. Promoting more profitable products or services means there is more wiggle room for spending on marketing while remaining profitable, for example.
Different products or services may also be promoted to different segments of your audience depending on how impacted they are by the recession.
The key to remember is that a recession is an important time to re-evaluate what exactly is being marketed and to shift focus depending on what is most appropriate in the context of a recession.
Mistake 6: Too many launches
Launches can be an effective way to grow market share, but a recession is not necessarily the time to lean into this strategy too much. Instead, it’s better to focus on core competencies rather than confusing customers with too many new offerings.
If a launch does not go as expected, it can be risky to sink marketing dollars into promoting it, rather than focusing on tried-and-true products and strategies.