The COVID-19 pandemic has had a significant impact on the global economy and has been a major contributor to the recession that many countries are experiencing. The pandemic has led to widespread business closures and disruptions in supply chains, resulting in job losses and reduced economic activity. With two consecutive quarters of negative gross domestic product (GDP), the U.S. entered a recession in the summer of 2022. Keeping the imminent crisis in mind, businesses have begun taking precautions in order to tackle the expected contraction of the economy.
Winning during a recession while companies cut budgets and buckle in for the worst is extremely difficult, but not impossible. We’ve all heard the adage, “When times are good, you should advertise. When times are bad, you must advertise.” And, research by the International Journal of Research in Marketing supports this idea. In fact, it shows that the companies that have bounced back most strongly are generally the ones that did not cut their marketing spend, and in many cases actually increased it.
Let’s look into why you should avoid slashing your marketing budget during a recession, and instead develop an aggressive marketing response.
- Gain an edge over competitors: When you lower your marketing budget, you restrict your visibility towards potential customers, thus creating a void where your competitors can swoop in and take advantage. Gaining exposure and creating a positive brand exposure are few of the things you should never compromise on!
- Keep driving sales: A surprising (but true) fact remains that boosting marketing during a recession might result in expansion, and can drive higher sales. Businesses that continue to market themselves during a recession stay in consumers’ minds, so when consumers have money to spend again, they naturally gravitate toward these brands.
- Sense of stability: Aggressive marketing during a recession is a show of strength and perseverance, which goes on to reflect that your business is thriving even in tough times. This builds customer confidence and prevents them from feeling abandoned, and customers are more likely to feel secure and spend their money on your product or service. This consistency will also allow you to retain your existing customers.
- Difficulty in bouncing back: Reduced marketing efforts put you in a challenging situation when the recession is over and you’re finally ready to recover. While difficult circumstances may not continue forever, businesses do. Therefore, if you reduce your marketing expenses, the market will eventually rebound against you, leaving you in a position of significant disadvantage. You will be grateful that you didn’t lose months or years of advancement once the economy starts to rebound.
- Good time to launch new products or services: Although it might seem counterproductive, a recession can be a great time to bring new products or services to market. With fewer product launches and less competition, your company can grab the undivided attention of your potential customers, with the help of a strong marketing strategy. Research shows that products launched during a recession have both higher long-term survival chances and higher sales revenues.
Thus, even if you are forced to cut marketing spend, the important question is not if you continue marketing, but where you put that precious remaining marketing budget to get the biggest and best outcomes during these times.
- Conduct new market research: Times of economic recession are turbulent times. Change is constant. Brands fade away. New buying and thinking tendencies become apparent to consumers. As a result, businesses that are market-savvy and motivated by research are best positioned to profit from the uncertainty and change.
- Focus on CX: A cross-industry study from 2021 showed that brands cannot afford to ignore the value of strong CX if they want to ensure their future success in the face of economic uncertainty. Organizations considered to be CX leaders generate a total cumulative return that is 3.4 times greater than that of CX laggards. Furthermore, PWC research shows that brands that focus on customer experience are able to charge a premium! It is true when they say, “Brands that focus on customer service and satisfaction throughout challenging economies win – during and after a recession.”
- Use Customer Experience to Create New Business: The newest and most powerful marketing is voice marketing. It is inexpensive and it scales. To do this effectively, start with these 3 focus areas: 1. Manage consistent data on every online website (Business Listings Management), 2. Collect and share customer feedback, and 3. Reply to all of you reviews whether they are good or bad. This will help you use your customer’s voice to power all of your locations. It will get you to the top of search engine rankings, and create a lot of new business.
Experience.com’s Experience Management Platform (XMP) makes it easy for marketing teams to collect and share feedback and manage their online reputation whether you have 10 locations, or 10,000. Click here to get a free trial of the Experience.com XMP