Why marketing is the most important role to consider during a recession
Are we headed toward a recession? Quite possibly. Layoffs are happening en masse right now around the country. Crossing several industries – tech, digital publishing, service jobs, and small businesses alike are feeling the crunch of inflation and making tough decisions to downsize. Heavy hitters like Buzzfeed, Microsoft, Twitter, CNN, and Morgan Stanley have recently reported job cuts amidst rising labor costs and slower growth.
For senior executives and managers who must eliminate staff positions, it is critical to handle layoffs in a way that doesn’t interrupt the overall flow of the business. Purpose-driven leadership can, after all, determine the future of the company’s success through key decision-making etiquette during challenging times.
Why is marketing during a recession critical for business?
Traditionally, marketing and public relations positions are hit hard during mass layoffs. However, companies should reconsider the value of marketing and PR services, especially during a recession.
If you are a new company or brand, you might not be fully aware of the power of marketing. Here’s a refresher on how marketing can protect your business at any time:
- Use social media to gain and keep customers. Even during a recession, people around the world are on social media. Marketing professionals assist in increasing your presence online with the goal of increasing your customer base.
- Keep a watchful eye on competitors (and customers, too). Using a tool like Ahrefs supports keyword research, which allows for careful competition surveillance. Additionally, marketers have their finger on the pulse of the company’s customer base. Spending habits, demographics, and being able to forecast how the market changes are all responsibilities of marketing professionals.
- More content, more purchasing. Valuable and informative content attracts potential customers. Based on Hubspot’s 2022 State of Marketing Trends report, 70% of marketers use storytelling as a powerful tool to help brands meet the customer where they are. In order to take companies to new, imaginative places, marketers use social media, blogs, email campaigns, and educational content to grow customer interest.
- Track progress. Analytics are key to evaluating whether marketing strategies are actually working. Programs like Google Analytics and Marketo are great tools for tracking progress.
Smart organizations understand that quality marketing helps keep the brand in place. Does this mean marketing is a worthy investment during a recession? Of course. Companies can use the economic downturn to trim marketing costs by identifying unnecessary and ineffective elements of their marketing strategy rather than laying off invaluable members of the marketing team.
How to market in a downturn
Businesses can soften the blow of slow growth during uncertain times by utilizing an existing marketing team.
Marketing professionals can help your brand or business evaluate market positions and advise on best practices and new opportunities to grow during slow periods. Marketing during a recession promotes better business by:
- Evaluating brand positioning in the marketplace. Companies can benefit from a unique team of individuals specializing in positioning during slow growth seasons.
- Creating an environment to sell. Folks are always willing to spend money. In fact, according to the 2022 BCG Recessionary Behavior Consumer Sentiment Survey, 55% of consumers across four countries (US, UK, Germany, and France) reported increased spending although 71% of individuals believed that their country was in a recession. If there is uncertainty in the market, people are more cautious, but that doesn’t mean there aren’t opportunities to profit.
- Analyzing the value of products and services. Many companies think these duties can be absorbed into sales positions, but marketing professionals are skilled at analyzing product or service value in order to keep brands competitive.
- Creating a long-term plan. Marketers should help stabilize the brand while developing an extended plan by shifting advertising and solidifying core values.
- Rethinking the budget. During a recession, managers wonder how they can do more with less, but this shouldn’t equate to marketing personnel layoffs. Instead, this could mean rethinking the communications budget and strategically placing more emphasis on areas that help drive revenue. Specific suggestions on budget adjustments include:
- Evaluate spending, performance, and reduce what costs the most and yields the lowest results. For some brands, this might include spending more of the budget on digital ads as opposed to physical ads (i.e., billboards, posters, etc.).
- Focus on organic efforts like SEO and the utilization of a creative social media strategy.
- Write blogs and share with your customer base by taking advantage of your email list.
Here’s How We Did It:
During the COVID-19 crisis, Red Thread supported IFMA’s goals of maintaining membership growth while reducing budgetary costs.
Despite a nearly 75% reduction in budget, IFMA’s Membership department maintained a campaign cost cost-per-conversion of less than half the desired $50 goal, 3000%+ return on ad spend with an overall return on ad spend of 662%.
For additional information about our collaboration, check out our case study on IFMA
How marketing can support the “after”
According to a Harvard Business Review study of marketing successes and failures during recessions from the 1970s and beyond, researchers found that consumer purchasing power resulted from feeling secure about their financial future and trusting that a company’s services or products can benefit their lifestyle.
As the 2020 pandemic swept the nation (and world), individuals and businesses were afraid these challenges would quicken a global recession similar to the financial crash of 2008. But many companies vowed to keep jobs safe. As sales in many industries dwindled, leaders still decreased the number of layoffs, proving that several approaches to keeping employees, such as furloughs, additional PTO, and wage adjustments, could also work.
Still, this past year has proven challenging, with layoffs being an inevitable approach to keeping businesses afloat. However, just like the pandemic year and the recession of the early 2000s, there are several ways to market during a downturn and utilize marketing to help rebuild after a recession.
When the economy turns around, the same key strategies (social media, watching the competition, marketing content, and analytics) can be used to elevate brands. Best practices like understanding new customer bases post-recession, surveying demographics, and consumer priorities take center stage in recession-proofing brands.
Whether layoffs are made or not, most forward-thinking companies would share this advice: don’t wait until the economy shifts upward to secure your customer base. Keeping up with marketing during a recession keeps vital tasks running so that companies can bounce back stronger than ever after the recession has passed.