Marketing During a Recession: 5 Ways to Cut Costs without Reducing Quality
With fears of an oncoming recession, most organizations have already begun tightening their belts. Marketing budgets are notorious for being the first to feel the squeeze. While some amount of “cutting the fat” can be useful for maintaining your organization’s bottom line, “across the board'' cuts run the risk of causing an adverse drop in business - typically defined by a vicious cycle of downsized communications and shrinking customer engagement.
Fortunately, economic trends ebb and flow, and while marketing in a recession can present some real challenges, it can often reveal equally poignant opportunities. It’s a great time to reconsider strategy and bolster the type of fundamentals that will leave your organization supercharged for growth over the long term. This week, we’re discussing how marketers can handle these challenges with a healthier mix of belt-tightening, optimization, and re-organization including:
Let’s dig a little deeper.
Narrow Your Audience
In the best of times, marketing to “everyone” is a formula for spending a lot of money quickly while influencing only a few. We harp on this relentlessly with executives in the startup ecosystem. It's one of those universal truths that can be applied to most organizations’ marketing strategy though, especially for those faced with a financial downturn like a recession or any other situation where your organization may not have as much liquidity.
The key to effectively narrowing your messaging strategy is identifying your customer base and understanding what they value most. In branding, we think of this as your “Superpower”. Forget about the fringe customers - the people who might be interested in your products and services under the right conditions. Who needs your product right now and why? Defining your core audience’s persona, journey, and influencers more narrowly and staying laser-focused on them will result in better ROI every time.
“Your messaging needs to be consistent enough to be recognized but flexible enough to focus on what’s driving your customers’ buying decisions right now.”
Update your Messaging
Why do people buy? The answer isn’t as static as you’d think and depends largely on how they feel about their current circumstances. That means that your messaging needs to be consistent enough to be recognized but flexible enough to focus on what’s driving your customers’ buying decisions right now.
For instance: Birkin bags may be the “height of luxury” in good times and “quality you can’t afford to skip” in bad. Even in a recession, no one wants to spend money on something that’s going to be outdated or broken in six months; your marketing should reflect that. Can you use messaging to nudge your brand’s position in one direction or another so that it features a more sustainable mix of value and dependence?
Focus on Reputation
We all know that happy customers advocate for their favorite brands. In fact, some purists argue that word-of-mouth is the only true form of marketing - labeling everything else as paid media. Customer sentiment can make the task of marketing in a recession cheaper to varying degrees or more expensive. Either way, we can confidently say that product and product support are the two largest “hidden” expenses on any marketer’s balance sheet.
Unfortunately, we can’t help build a better product or improve your support apparatus. What we can do is pose a gentle reminder that these two aspects of your organization are intimately connected. Therefore, your goal as a marketer should include establishing friendly marketing strategies to address negative reviews and amplify good reviews, customer surveys, and website testimonials. . While reputation marketing may not play out as quickly as other types of outreach, it’s less expensive, longer standing, and much easier to scale.
Rethink Ad Strategies
In a perfect world, our products would sell themselves through reputation and word-of-mouth alone. Some brands like Blue Nile, Costco, and Amazon have built their entire business model around it. That said, it can take time, and ads can be used to boost awareness of your brand’s value propositions, certain flagship products, and customer sentiment right now. Programmatic advertising is notorious for high cash burn rates (especially when unoptimized) and it’s one of the first expenses marketers should audit when entering a recession.
Let’s look at a few ad strategies that may help reign in your budget and drive deeper ROI. Please note: This isn’t intended to be a comprehensive list, but to help start a discussion about how advertising budgets can be tailored for leaner times.
There are many worthy pieces of content online about how to optimize your ad setting and delivery strategies on Google and other platforms. We won’t recount them here except to say that hiring a local ad agency, spending a week or two on YouTube, and working with the right platform can be a great starting point.
A recession based-ad strategy shouldn’t be limited to Google and Facebook. Platforms like “Share-a-Sale” and other affiliates, influencer marketing through Tik-Tok, Instagram, and YouTube can offer more flexible performance based pay scales and have a major impact for consumer brands. If your target market is locally based, consider getting out of the digital ecosystem. If you’re niche-based, look at display advertising through direct advertising platforms.
Sending your customers to targeted landing pages can significantly impact RoAS. That’s because customers are looking for immediate answers to highly targeted questions. “Drag and drop” landing page builders like Unbounce and Kinsta make a single landing page template that can be easily implemented across a wide range of ads quickly.
Examine Your Operations
Decreasing your marketing department’s footprint is a time-honored, if often uncomfortable, method of reigning in expenses during a recession. After all, is a full-time copywriter, SEO, or ad manager necessary? In some cases, yes, but in fast-growing organizations like startups, they tend to make you bloated and less flexible. Let's talk about some alternatives.
A third way includes leveraging an integrated marketing agency to take on operational marketing tasks as you grow. This solution allows your marketing strategist (commonly a VP, SVP, Director of Marketing or Chief Marketing Officer) to form a hub and spoke relationship with off-site marketing team who can implement their strategy with the same benefits as a fully integrated onsite team - but via a shared marketing backbone for a fraction of the cost.
The most common solution is making current team members do more with less. While it's important that everyone pitches in for the good of the whole, this can also lead to burn-out, misaligned skills, and entropy between departments. Other solutions include moving current in-house resources to a variety of marketing agencies or freelancers. However, that often leads to a swarm of unrelated players competing for your marketing dollar instead of working to amplify its impact.
Finding Success at Marketing During a Recession
Just because your marketing budget is decreasing doesn’t mean your communications strategy has to. Oftentimes, a close look at how you're spending rather than what you’re spending can have the same net impact on keeping the organization healthy enough to ride things out. Even so, it’s important to remember that the benefit of these changes can’t be viewed exclusively through the lens of their immediate impact on your organization. While general cutbacks eventually require you to reconstitute your marketing department’s intellectual capital (an expensive proposition these days), more deliberate changes will leave you with a leaner, stronger, and more flexible marketing apparatus for years to come, amplifying the impact of your marketing dollar well after the end of the recession.
For more information on the strategies shared in this post, please get in touch.