Businesses are just recovering from the coronavirus pandemic. Add the threat of an economic recession to the mix and it is easy to see why everyone is overwhelmed.
Deutsche Bank is the first major institution to predict an imminent recession. Investors, both professional and retail, also share the bank’s gloomy economic outlook, with many predicting a recession in the coming year.
When asked when the next economic downturn would start, 48.4 per cent of the respondents in a Bloomberg survey said next year, while another 20.8 per cent said 2024.
This means a recession isn’t too far away and the best you can do is find ways to cushion your business from its effects.
Image via Bloomberg
Consumer recession creates uncertainty, which causes many businesses to make poor decisions. For example, most companies immediately look to cut down their costs during an economic downturn.
In particular, many businesses start questioning the value of their marketing efforts. However, what many don’t realize is that going slow on marketing harms their ability to survive the recession even more and jeopardizes their long-term growth.
This post explains how to use marketing to overcome consumer recession and emerge stronger than your competitors.
Reasons Why Marketing in a Recession is Essential
Marketing to overcome consumer recession is not optional, but necessary. But how can you spend on marketing when business is slow and margins are tight?
Well, there are numerous digital marketing tools and tactics that you can use to promote your business in a tight budget.
Like customers, businesses must also change their approach in a recession. Consumers are now prioritizing essential purchases and businesses must change their campaigns and strategies to match customer needs.
Here are a few reasons why marketing to overcome consumer recession is essential in an economic downturn.
1. Cutting Costs Has Long-term Consequences
Slashing your marketing budget during an economic recession sounds like a good idea, but it can do more harm than good. Going slow on marketing will reduce your brand awareness, customer loyalty and search performance.
This opens the door for your competitors to fill the void and grow their market share.
That’s why it is important to use marketing to overcome consumer recession. Maintaining your marketing efforts during an economic downturn has the following benefits:
- It gives you a strong online presence
- It improves your brand awareness with new customers
- It helps you build confidence with your target audience
- It enhances your brand loyalty
2. Campaigns Should Evolve to Meet Customer Needs
When things get tough, the needs of customers and their buying habits change. Customers start prioritizing essential items and are less likely to spend on luxury items.
While re-using existing marketing content may be tempting, you will be disappointed in the results because the content isn’t tailored to the current needs of your customers.
Instead, you want to re-evaluate your marketing strategy and use the right tools to reach your customers online.
There are tools to create optimized marketing funnels using tools like ClickFunnels that you can use that are more suited to your business.
Businesses that adjust their campaigns based on the needs and spending habits of their customers perform much better when things get tough.
3. The Decreased Competition Gives You an Advantage
Another reason for marketing to overcome consumer recession is to enjoy a less competitive market environment. Your competitors will immediately cut their marketing budgets when things get tough.
This will reduce their presence online, opening up plenty of room for you to get ahead.
Most businesses also slash their R&D budgets. This means new products will not be released, thus reducing the competition in the market.
By positioning yourself strategically when things are tough, you stand to gain from the lack of marketing by your competitors. You can stand out from the rest during a recession by:
- Maintaining or increasing your R&D budget to create better products.
- Staying connected with your customers via social media marketing.
- Using website personalization to reach customers more effectively.
During the 1973-1975 recession, Toyota was second to Honda in sales in the US. Despite the hard economic times, the company resisted the temptation to slash its marketing budget.
Image via Flickr
By 1976, Toyota had become the leading imported car brand in the US. This shows that marketing to overcome consumer recession is one way to set your organization up for future success.
5 Marketing Strategies to Overcome Consumer Recession
It may not be possible to market your business to your full capacity during an economic downturn, but cutting your marketing budget entirely is not an option.
Let’s now take a look at some effective ways to use marketing to overcome consumer recession.
1. Focus on Customer Retention
A loyal customer base is one of the greatest assets for any business during a recession.
A recent Zapier survey on recession found that the top change that tech companies would make to survive an economic downturn is to focus on customer retention.
Image via Zapier
This study supports one of the well-known secrets in marketing: it’s cheaper and simpler to market to existing customers than to acquire new clients.
Your existing customers already know and trust your business. They are happy with your products and would buy them again when the need arises.
You can build a email list of existing customers and send them the messages for the current and upcoming offers, loyalty schemes and greeting on the festivals.
To get your existing customers to buy more from your company, you need to show them how much you appreciate them. You can do this by:
- Staying in touch through positive emails
- Giving them exclusive discounts
- Giving customers the confidence that your business will weather the storm
2. Prioritize Content Marketing
As we have already established, many companies rush to reduce their marketing costs when a recession hits. This is great news for you since it makes it easier for you to use this opportunity to gain an advantage.
Ranking higher on search engine results pages becomes easier because there aren’t many organizations investing in SEO. We all know the importance of international SEO in marketing and that’s why you want to prioritize content marketing during a recession.
Besides helping you rank higher on SERPs, using content marketing to overcome consumer recession also allows you to show your expertise on the issues that matter to your audience.
By creating compelling content, you demonstrate your authority to potential customers. Make sure to share your content on social media to reach as many people as possible.
For example, if you are a B2B brand, you should share your content on LinkedIn to reach the key decision-makers in your target companies. This move will boost your LinkedIn lead generation efforts and help you reach more high-value customers.
3. Study the Competition
How are your competitors using marketing to overcome consumer recession? Which lead generation strategies are they using to grow their brands? How are they engaging their customers?
If you want to get ahead during a recession, you should study what your competitors are doing and outperform them. If they are giving discounts to attract customers, you need to find better incentives for your prospects or they will move to the competition.
However, you shouldn’t copy exactly what the competition is doing. The key is to find a way to stand out in the market to give shoppers a reason to choose your brand.
Here are four effective strategies to differentiate your business from the competition:
- Provide great customer service – You don’t want customers to leave you because of poor customer service. Go out of your way to make your customers happy and generate repeat business.
- Add a personal touch – Make the shopping experience memorable for customers to earn their trust and loyalty.
- Be socially responsible – Show that you are concerned about people and the planet to appeal to socially conscious consumers.
- Use speed to stand out – Provide quicker and more flexible delivery options to encourage customers to choose you over your competitors.
4. Consider Tiered Services
Service-based businesses or SaaS businesses can use marketing to overcome recession by offering tiered plans and packages.
During a recession, customers may not be able to afford your premium services anymore. Their first instinct will be to forgo such expensive services but you can retain them as customers by offering tiered services.
You can break down your service into different packages that customers can access based on their current needs and budget. The lowest tier will be the most affordable but offers the least amount of features and benefits.
Cash-strapped customers can simply downgrade to the lowest tier when things get tough rather than cancel their subscriptions.
Your income will decline when many users take this option but it allows you to retain customers and build long-term relationships with them.
5. Update Your Product Offerings
Economic recession forces consumers to cut down their spending. Most customers cut out all unnecessary expenses and use their limited funds to pay for the essentials they need in their life.
If your business doesn’t provide essential goods or services, there is a high chance you will also be on the chopping board. However, you can prevent this by updating your offerings or adding essential services to convince customers to buy from you.
Marketing can help you position your brand in a new light and convince consumers that they need your new and improved products.
Economic recessions are hard on consumers, forcing many to reduce their spending to survive the tough economic times. Businesses need to work extra hard to convince cash-strapped customers to buy from them, making marketing during a recession a necessity.
In this post, I have explained how to use marketing to overcome consumer recession. Implement these marketing strategies to stay connected with customers and outdo the competition. All the best.
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Reena is Director of Operations and Sales at Attrock, a result-driven digital marketing company. With 10+ years of sales and operations experience in the field of e-commerce and digital marketing, she is quite an industry expert. She is a people person and considers the human resources as the most valuable asset of a company. In her free time, you would find her spending quality time with her brilliant, almost teenage daughter and watching her grow in this digital, fast-paced era.