24 Oct Surviving the slump: Why marketing is key
Watching the UK news over the past fortnight has been less like a rollercoaster ride and more like a zero gravity drop tower that leaves you struggling to hold onto your lunch.
With the economy in freefall and the spectre of a downturn looming larger than this year’s Halloween pumpkins, everyone – from private individuals to big business to the chancellor himself – is scrabbling around for a fiscal survival strategy.
In business, if you’re looking to trim the fat, your marketing budget might be first in the crosshairs – but it’s a mistake made all too often.
History shows us that when times are good, you should advertise – but when times are bad, you MUST advertise. But we would say that, wouldn’t we? If you need convincing, read on for some common-sense reasons marketing is essential in a recession, and tips for getting the most from your budget.
In good times and bad
During World War II, a shortage of sugar meant that Coca-Cola had to shut down many of its operations. The cost of a bottle of Coke went up by 20% – but the company president pledged that regardless of what it cost the business, every man in a US uniform would still be able to buy a bottle for the pre-war 5c price. Coke became so beloved by troops that the Government and the Army began ordering shipments into Europe and North Africa, and eventually supported Coca-Cola to set up bottling plants close to major military bases abroad. When peace returned, Coca-Cola was poised for worldwide growth, swept along on a wave of goodwill built up during its support for the war effort.
In the recession of 1981-82 companies that continued to invest in advertising saw more growth than their competitors that cut their budgets – to the tune of a staggering 256%. In the 2008 recession, statistics showed 3.5 times more brand visibility for companies and organisations that maintained their marketing output. The bottom line is, if you’re there for your customers during the bad times, they will be there for you in the good.
Retention is everything
Marketing naturally focuses on growth and acquiring new business – after all, you’re not in business just to stand still. But in a recession, standing still may be the absolute best any business can hope for – and this is where the value of a loyal client base comes into its own. It costs five times as much to acquire a new customer as it does to retain an existing one, and the average conversion rate for existing customers is over 60%, compared to less than 20% for new ones.
Marketing to existing customers during a recession builds confidence and trust in your brand by showing them it’s business as usual, even when times are tough. Of course, this doesn’t mean you should ignore the situation – in fact, it’s important to acknowledge it, and be sensitive to the hardships your customers are also facing. This in itself can help to build loyalty that will keep your brand top of mind when things start looking up.
Fortune favours the bold
During periods of economic growth, it’s common for businesses to struggle with marketing due to the sheer noise created by their competitors. Recession has the effect of turning down the volume, and creating space for your message to be heard. During a recession, some of your competitors WILL inevitably cut their marketing spend. Others may shut down altogether. The cost of PPC keywords inevitably reduces as fewer companies bid on them. Whatever way you look at it, fortune favours the bold – the brands that maintain their marketing efforts in an attempt to shine brighter in the darkness.
In adversity, opportunity
We don’t have to look too far back in history (or too far from home) to find an example of a cloud with a silver lining. When the Covid-19 pandemic hit, we were really worried about our own business. Would our clients pull the plug on their marketing? How would we transition to 100% remote working? How would we win new business if we couldn’t travel to meet new clients?
Although the pandemic presented many challenges for us on a business and a personal level, it also handed us the keys to a whole new era. Having previously struggled to attract talent due to our remote location, suddenly everyone was working from home, and the world was our recruitment oyster. As businesses pivoted to adapt, they needed marketing support more than ever. In two short years, our business tripled in size, and many of our clients experienced unprecedented growth, or embarked on exciting new journeys.
In difficult times, it’s tempting to retreat and batten down the hatches – but often it’s a perfect time to strike out towards something new. In the words of Charles Darwin: “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.”
Optimise & outsource
Of course, we’re not suggesting businesses should throw all caution to the wind when it comes to marketing in a tough economic climate. But there are things they can do to get more bang for their marketing buck.
Staying consistent is important for maintaining the trust and loyalty of existing customers, but brands that stick in the mud are likely to get left behind in an evolving socioeconomic climate. Now is NOT the time to rebrand – but subtle, iterative changes in offering and tone that speak to the challenges and insecurities of customers can pay dividends.
As you keep your friends close, keep your enemies closer – watch what your competitors are doing, so you can identify gaps in the market or failings you may be able to address. Lean into free data from analytics and cost-efficient tools like SEO to uncover and exploit what your customers really want or need when the chips are down.
Last but not least – outsource. Marketing strategy is highly complex with many moving parts and few businesses can afford to maintain an in-house team with the necessary diverse skillset. Outsourcing offers the most cost-effective solution, enabling you to cherry-pick from a range of services to develop a tailor-made approach for your business and clients.
We specialise in tailored, transparent marketing strategy and support that makes a measurable difference for our clients. To discuss your requirements, get in touch!