No two recessions are the same, so any time we hit one, marketers need to rewrite the script for maintaining company revenue and brand loyalty. There is some talk about an increased potential for a recession towards the end of 2022 or first half of 2023. Will it happen? I don’t know, but I have started advising my clients to act as if it will happen, and do things that will better position them to weather any downturn more successfully if – or when – it does. Best practices are best practices, so I thought I’d share some insights here.
You need to support your brand and remain relevant or you will not be positioned very well for recovery when the downturn lifts. At the same time, you will likely not have the same gross revenue. During a recession your customers will set different priorities for their spending that may affect your sales and revenue. You should certainly take this into consideration when adjusting your marketing focus and budget.
Stay informed about how your best customers’ needs and priorities change, and respond accordingly. Sales happen at the intersection of need, solution, and budget. If the need changes or becomes more or less of a priority, your revenue will rise and fall with these factors. Knowing about any shift in the pain points will help you narrow the focus of your marketing efforts, and reduce your budget while optimizing for conversion.
In addition to their needs and priorities, you should track any changes in the value customers are seeking, and realign your offerings to that value (if possible). Flexibility here will drive success. Winning new business is always more difficult than retaining business, but it’s even more difficult in a recession. Retention of your top customers should be a main goal.
Another datapoint that helps is knowing the urgency of solving the pain point. If your customer is not in need of your offering for the foreseeable future, they won’t invest in a purchase from you until it becomes more urgent. Customers that are going to delay or push their purchases into the future should be removed from the target group until they have a greater urgency. If, however, they are in urgent need of the solution they will come up with the budget to make the purchase, but you may need to assist them with some creative options to facilitate the purchase.
If their available budget for the purchase drops, what can you do? I don’t recommend lowering your price, in fact, based on the costs or providing your offerings, you may need to increase your pricing. You can, however, get creative with your pricing, offerings, or payment plans. The easier you make it for your customers to continue doing business with you in the face of budgetary constraints on their end, the more likely you will be to retain those customers and build loyalty.
During any recession, it’s more important than ever to remember that loyal customers are the lifeblood of your business. Marketing isn’t optional (ever), but it is a “good cost” that is essential to bringing in revenues from these key customers and others. Company budget cuts often affect marketing disproportionately, but if you make smart decisions, you will weather the recession better. In managing their marketing expenses, however, businesses must take care to distinguish between the necessary and the wasteful. Building and maintaining strong brands—ones that customers recognize and trust—remains one of the best ways to reduce business risk.
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