Employment is at fifty-year low and most everyone’s 401K is growing like the grass in my backyard after a week of summer rain. Yet rumors of an impending recession are popping up everywhere. Not to be a Debbie-Downer, but what goes up must come down. Markets and the economy are cyclical. Whether the recession hits as predicted later this year or in five years, we will experience a downturn at some point. The time to prepare for rain is when the sun is shining.
One of the first budget items to be slashed in a recession is marketing. By preparing your marketing strategy to withstand an economic slowdown, you can continue reaching your existing customers and new customers while your competitors fade into the background. Not only will these steps help you survive a recession, they’ll strengthen your business now while times are good.
Email isn’t dead. In fact, it’s growing in popularity. With so much competition on social media, email is the one place your customers are listening to your story the way you want to tell it. If you haven’t been collecting customer email addresses start today. Almost every retailer asks for an email address at the register. They send out digital receipts, coupons, and notices of upcoming sales. Your business, no matter how small, can benefit from setting up these same processes.
To keep your customers engaged, send out relevant information at intervals that won’t be seen as overbearing or intrusive. That frequency depends on the industry. Retailers with coupons and sales could retain high open rates with multiple emails a week while a B2B company might get the best returns on monthly sends.
By starting your email marketing campaign now, while times are good, you can analyze the data, find out what products and price points interest your customers most, and prepare your inventory and services accordingly.
Social Media Ads. Google Ads. Geofencing. Advertising on digital media runs the gamut and your results may too. Use these days of plenty to test budgets, audiences, creative content, and frequency for response rates and profitability. If you must cut your marketing budget during a downturn, you’ll have concrete data that helps you determine which media needs to stay and how to most effectively run those ads.
Test and Tweak Everything
When we run social media and Google ads, we run multiple ads at the same time. Throughout the month we review ad performance and tweak our next set of ads based on the data we gathered. This analysis doesn’t have to be difficult. Figure out what’s most important to you. Website clicks? Reach? Engagement? Which ads reach your goals for the least amount of money?
For one of our clients, we found images showing a person’s face increased engagement and decreased cost. We can afford to test those aspects now but will use this information to create better ads if we have to tighten our budget later.
Testing and tweaking doesn’t just apply to digital advertising. Want to know if one billboard location is better than another? Want to try out radio advertising? Now’s the time to dedicate some budget to experimenting with traditional advertising you may not have tried in the past. Create a plan and strategy based on your goals and customer demographics. You won’t be left wondering if another tactic would work during a season when you don’t have extra advertising dollars to spend.
Maybe networking isn’t the first activity you think of when talking about marketing, but networking is about building relationships. Relationships with your vendors, customers, and community partners will keep your business afloat during difficult times. Your vendors can help you find creative ways to manage inventory or learn from trends they’ve observed across the industry. Vendors with supply or cash flow problems can trickle down to affect your inventory and sales. The more you know about the people from whom you buy products the more prepared you’ll be future ups and downs.
Knowing your customers helps you gauge what they’re willing to buy and how much they’re willing to spend. Do your customers plan to postpone large purchases if the economy heads south, or are they stable enough in their employment they don’t expect to make any changes? Get to know your customers on more than a transactional basis. Ask them questions about their future planned purchases. All this information allows you to tailor your marketing messages so they hit your customer’s pain points dead on.
Make Smart Business Decisions
Momentum Consulting began in March 2008, just as we were diving deep into the Great Recession. One of our first clients continued to grow their business through the recession and remained strong moving to the recovery phase. An unexpected health crisis forced the closure of the business even though they’d weathered a difficult economic storm. This situation continues to serve as a reminder that no matter how well we market your business or how many customers you have, factors beyond marketing will affect whether you survive good or bad economic times.
Talk to your attorney to ensure your contracts cover your company’s liabilities. Meet with an insurance agent to review your policies and protect all aspects of your business and your key employees. Hire an accountant to make sure you’re following best practices and stay out of trouble with the IRS.
Yes, all these professionals require money to hire, but if you don’t hire them during the good times when you don’t think you need, you won’t have the funds to hire them later in an emergency.
We don’t have a crystal ball to tell you what’s coming in your industry, our nation, or the world. If you’ve been an adult for longer than fifteen minutes you know we’re living in a volatile world. What we do know is the strongest businesses don’t stop marketing in a recession, they just do it smarter.