Marketing During the Downturn: Recession Strategy 101

You're not the only one that is unsure of what your marketing plan should be for 2023. There’s confusion about how brands should react now and what to prepare for in the months ahead. Many of us have never experienced a worldwide recession as a business owner (because the majority of Kiwi SMBs do not survive past five years). Don’t put yourself in the position of this year claim you as one of those stats.

The 2008 recession is probably the only recent event that can be used as a comparison. Although there is some hope for digital marketers, it is important to remember that at the time, it made up a very small portion of the overall marketing mix.

Online spending overall decreased by 2% in 2008, although more conventional advertising channels saw significant declines. Spending on newspaper advertising fell by 27%, while outdoor advertising fell by 18%. (data reflects the US market).

Now the question may be why not turn off marketing altogether?” Hopefully, this article will explain the exact role marketing plays in helping a business soften the effects of the crisis and the looming recession.

What Happens During a Recession? 

A recession is, in its most basic sense, a slowdown in economic activity that is more specifically described as at least two consecutive quarters of negative economic growth.

But this isn’t a particularly useful definition for marketers. 

Businesses need to know exactly how this economic downturn will look, and since we're in uncharted territory, this is proving to be a very difficult task for economists

The V-shape, U-shape, and L-shape are the three geometries at which recessions are known to occur. Each has an effect that gets longer and longer-lasting on our economies, our companies, and ultimately on us, the marketers and business owners.

So What Role Does Marketing Play Exactly? 

When the economy is slow, marketing plays two crucial roles in helping your company survive. It can be used, first, to lessen the severity of the downturn—that is, how much your growth slows—by a certain amount. By increasing your business during the upturn once the economy recovers, it can also shorten the duration of the recession's effects.

What Should Your Recession Marketing Plan Look Like? 

Ideally, it should have three parts. One for the ride down, one for the ride up, and then a third for the acceleration after. 

Stage 1: Soften the Downfall

When market uncertainty strikes and our business as usual strategies stall, it's critical to have the following things covered:

Maintain Agility to Pivot, Turn Off Irrelevant Campaigns

The toughest corner to position your brand in is to hope that you can ride it out and keep quiet while running business-as-usual marketing. This means you’re currently not investing your time in softening the depth of the downturn for your business. We’re all about to be pushed out of the airplane and to not open your parachute will hurt your business down the line.

Do you really need to be running your mission-based, or cause related campaigns right now, or at such at volume?

Use All the Data You Can to Understand Consumer Behaviour 

Your customers might not need the goods or services that were in demand yesterday. Utilize all the data you have, whether it comes from your web properties or your social media initiatives, to identify the parts of your organisation that are now relevant to your audiences and discover new methods to innovate. Your company may still be able to help them with their immediate problems.

Stage 2: All Efforts to Shorten Duration

You want to be sure that your brand is top of mind as soon as there’s an upturn in the economy.. Businesses that kept up their advertising during the 2008 recession were able to expand greatly; Amazon, for instance, expanded by 28% in 2009. It is also a time when the cost of advertising had halved, which creates a possible opportunity for prepared marketers.

Double Down on Brand Loyalty

Your core customers today may just be what gets you through the economic slowdown. Turn your focus on understanding their exact concerns today. What can your business do now to ensure their loyalty extends further than the recession? Once spending habits shift, you'll be able to convert that loyalty into business growth.

Focus on More Content and Value Through Content

Just because you’re market may be cooling off, doesn’t mean that they aren’t going to be in need of your goods or services on the upside of the recession. Focus on building rapport, and relationships through providing value through content, so when the time comes - you’ve stayed front of mind.

Don’t be afraid to try something!

Get creative with how your business can provide value. It may not only be through direct product sales, but could involve services or subscriptions. You could in the end find new revenue streams for your business. Don’t be afraid to offer alternative pricing either. 

Stage 3: Earn the Time Back  

If you’ve set up your business for growth during the second stage of the recession, you may be able to catch up if the downturn hasn’t been too long. Being top of mind will allow you to tap into the recovering economy.

Spend More Than Ever

With the downturn coming to an end, this is your opportunity to get leaps and bounds ahead of your competition, Each business will have weathered the crisis differently, and if yours was set up just right for this stage then increasing your advertising spending can help you expand. 

Continue to Measure Consumer Behaviour

With the downturn coming to an end, this is your opportunity to get leaps and bounds ahead of your competition, Each business will have weathered the crisis differently, and if yours was set up just right for this stage then increasing your advertising spending can help you expand. 

Diversify your Revenue Streams

If there’s anything that we learnt during the early stage of COVID-19, it’s that many of us simply don’t have enough liquidity to buffer an economic downturn. One route to take would be to invest in contingency funds for such scenarios in the future. The second route is to think about how you can build more alternative revenue streams for your business. 

The Takeaway

This is going to be a time when we are truly tested for how fast we can move on our feet and how readily we’re willing to accept and act on the dire state of our circumstances. One of the biggest dangers is for business owners to stay optimistic rather than cautious. 

What the next couple of months are going to look like for your business does not only depend on the circumstances, but also on how exactly you choose to face them.

Be Brave! And if you don’t know where to start, ask for help.

We have the capacity to take on marketing planning clients to get a jump start on 2023.