I’m not an economic expert, so I won’t attempt to speculate on how long the economy will be in a downturn. However, I can say that we can survive the storm by focusing on the customer.
Whether the economy is up or down, you should set budgets with your business goals in mind. Marketing is more important than ever. What do chief marketing officers think of marketing during a down economy? Ninety-four percent believe that a tough economic period is precisely the time when marketing plays a key role.*
Here are a few suggestions to consider during the current economy:
Focus on additional value. Think more about how to engage your audience. It’s your audience that will ultimately determine your success. Can you add more value than your competitors? Value can take many shapes.
Consider these value statements:
- Buy our software and upgrade to the pro edition for free.
- Hybrid vehicle owners save $1,500 per year.
Focus on price and savings. Put yourself in the consumer’s shoes. Regardless of the economy, if your TV breaks, you’re going to buy a new one. In a booming economy, the more features the better. In a down economy, we focus less on features and more on staying within our budget. You should test ad copy and landing pages that focus on savings. Recently there are more visits to coupon sites and searches that include the words discount, coupon and sale. *
Be aggressive. Marketing budgets will be slashed. Advertising Age states that in the 2001 recession, the advertising industry suffered its deepest budget cutbacks in 75 years. It’s important to know that if a business continues to market in this environment, it can gain market share. Businesses entering a recession with an established strategic emphasis on marketing can come out of a recession ahead of the competition. Marketers who perceive the recession as an opportunity can capitalize on it.
One of the worst decisions you can make during a down economy is to cut your advertising budget. A study of business-to-business companies during the 1981 recession states that businesses that increased their advertising expenditures during that time saw an increase in sales of over 200% compared to those that cut. This is most likely due to their competition deciding to decrease their advertising budget. Now is the time when customers want to hear from you and learn how you can make their lives better.
Listen to your customers. In difficult times, there is less competition in the market and customer’s needs go unmet. Now is the time for your brand to seize the opportunity to fulfill those needs and find new ways to take care of your customer’s needs through innovative new products. The recession can be an opportunity to make a splash in a quiet marketplace.
Refine your ad exposure. Always test your ad copy to maximize your business goals. This doesn’t change in a recession. It helps you understand customers. The better you understand them, the better you can market to them, the higher your sales rates become and the higher your ROI.
If you find ads that aren’t performing, replace them. Refine the message so every time your ad is viewed, you have the highest possible chance for a sale. If your budget is decreasing, every dollar spent counts more than ever.
Develop Key Performance Indicators. Key performance indicators are how you define success in your business. While sales is the primary metric, it’s also critical to develop other metrics that allow you to measure your organization more accurately and develop greater predicative measurement tools that can help you spot trends before they impact your business. Performance indicators will help you analyze your marketing efforts in ways that will provide value to the organization.
Change your focus. Consumers will look online more. This year has seen a 10% increase in people who research online before buying in the store.* Web marketing allows you to measure results for ROI. The tracking and analysis capabilities also reveal data about consumers that can be used to target and communicate effectively. Social networks and online marketing tools deliver numerous benefits. Online marketing is less expensive and often more effective than traditional marketing options for reaching target audiences. Use these tools to strengthen brand confidence.
Consumer habits change in a recession. They’ll spend less on personal items and optional purchases, but are willing to spend more on brands they value. Use your dollars more effectively to develop a stronger brand relationship with customers. Many marketers struggle to create messages that appeal to customers. Monitor customer activity to learn what pops. Research can provide insight into customer behavior as well as potential opportunities.
During a recession, businesses can’t afford to lose customers. It’s much more expensive to gain than to retain, which is why it’s critical to focus on current customers. Turn your customers into loyal brand evangelists by focusing on their needs. Use marketing to create confidence in the brand in a way that will connect with customers. Understand the recession and its impact on your consumer, and act quickly.
A down economy is a great opportunity for brand strengthening. Proactive marketing sends a message to customers that the organization is confident during hard times. It’s well documented that brands that increase advertising during a recession, while competitors are cutting back, can improve market share and ROI at a lower cost than during good economic times.
If increasing marketing budgets isn’t possible, don’t suspend spending. This isn’t the time to cut advertising. Though increasing your marketing budget is a great way to gain on competition, the reality is that it’s not always possible to do so. Be sure to maintain a presence in the market. This way your company will stay top-of-mind when the economy picks up and people are ready to spend.