Economists often disagree but 2023 is being especially thorny for predictions about the American economy, which makes business strategy more difficult than usual. While the global economy is troubled and some American economists are predicting a recession, U.S. inflation dropped in November to 7.1% (as of this writing, December numbers have not yet been released).
President Biden cheered the December jobs report, saying it was a sign his economic plan was working. According to a January 6, 2022 report U.S. employers added 223,000 jobs in December. That meant unemployment fell to 3.5%.
Still, economists are arguing as to which of three paths the U.S. economy could take in 2023. Planning is especially difficult because volatile situations – such as Russia’s invasion of Ukraine (which has already sparked global increases in fuel costs) – are not yet over or stabilized.
How can you create a business strategy for a possible economic downturn? How do you market during a recession – if there is one. The good news is that past recessions (as well as economic and/or industry downturns) provide a model for not just survival but also success.
How Does a Recession Affect Marketing?
When there’s any sort of economic adversity, whether that’s a recession or something else, consumers still shop – both for daily essentials and to replace high-ticket items that may break. How this affects marketing is that the buyer’s journey for significant purchases becomes longer.
During a recession or economic downturn, consumers “over-shop”. This means spending more time researching the services and products they buy, and the more expensive the purchase the more time they take. So, marketing strategies need to adapt. If your business is accustomed to a certain pace of lead conversion, expect it to take longer.
That also means a need for more touchpoints between the period when the consumer first hears about your business and when they’re ready buy. This could involve producing more content that demonstrates the quality and value of what you offer. Boosting your online presence so you look like the best (or only) solution also helps. If appropriate, it might also make sense to create offers that involve trial periods or a reduced price for the first month of a service.
Should You Advertise During a Recession?
Yes, maintaining your advertising and marketing budget is crucial to surviving an economic downturn. E-Commerce Times was even more blunt about it, with one of its headlines reading, “Marketing Advice in a Troubled Economy: Increase Spend or Lose Sales.”
Why is it a good business strategy? E-Commerce Times notes that companies that increased their marketing spend during prior recessions had an average of 17% greater sales. On the other side, those who cut marketing and advertising sales saw a decrease of 15% of their revenue – if their business even survived.
The even better news is that because so many businesses cut expenses during an economic downturn (and frequently slash or even eliminate marketing), you can end up with a better ROI on your marketing budget. Ad costs frequently drop for both social media and PPC ads because bidding from competitors decreases. That means your marketing budget can go farther than usual, and prospects will see fewer of your competitors because of their decreased spending… allowing you to increase your market share.
Also remember that every economic downturn eventually ends. People will frequently research products and services now that they purchase as soon as their economic situation improves. You want to stay in front of their attention until they’re ready, willing, and able to buy.
What Can Marketers Do During a Recession?
During a recession, marketing is even more important – as we’ve shown. However, your marketing and business strategy should change. Focus on customer loyalty. That includes both luring existing and prior customers back for more purchases while encouraging them to provide referrals and testimonials.
Good business strategy at this time also means emphasizing your company’s stability. So even if you want to offer specials to bring in more business, angle the specials so it looks like you’re doing it from a place of compassion for your customers instead of desperation for yourself.
Making your customers feel appreciated is also important. If you don’t already have an email marketing campaign, consider adding one. If you do, come up with appropriate offers and plenty of useful information that makes you indispensable.
Improving your content marketing is also important. Remember, consumers are doing more research… not less. Good website content draws in those researching consumers and establishes you as the expert in your field, boosting your brand’s authority and trustworthiness.
Efferent Media Can Grow Your Business in Any Economy
Efferent Media has more than 10 years of experience growing mom-and-pop businesses into multi-million dollar businesses. We specialize in hair restoration and medical marketing while also serving clients in industries as diverse as pest control, beauty, and solar panels. Efferent Media will tailor each of our services for you and your business needs. Contact us today and have the website your business deserves.