The entire world is facing some sort of economic disruption right now. And no one knows the truth about when businesses will be “back to normal”. It’s incredibly difficult for most companies to know the best way to navigate an economic downturn. You may have considered cutting your business’s spending budget to help stockpile cash. Still, while this is a logical thing to do. Many business owners tend to cut spending in areas that actually do them more harm than good. Namely their marketing budget.
In this article, we’re going to look at how businesses have optimized their marketing strategies during times of economic uncertainty, and what you should consider when looking to make cuts to your marketing budget.
What History Shows About Marketing During Downturns
History is full of examples showing how businesses can massively benefit from economic downturns — if their strategy is right.
Take the example of fast-food restaurants, Pizza Hut and Taco Bell. During the 1990–1991 recession, McDonald’s decided to cut its advertising budget significantly. Both Pizza Hut and Taco Bell benefited enormously, gaining a 61% and 40% increase in sales, respectively. McDonald’s actually saw a 28% decline in sales — proving that marketing is even more crucial during a downturn.
Other examples date back nearly 100 years ago during the Great Depression. Kelloggs, the maker of Corn Flakes and Rice Krispies, doubled their marketing spend during the Great Depression, while rivals chose to cut back. As a result, Kelloggs overtook its once-bigger rivals and has since maintained the position as a market-leading brand.
How To Market During an Economic Downturn in 2020
The historical examples above prove the idea that optimizing your strategy and increasing your marketing budget spending during a downturn improves not only your sales but your overall market position. But how should you be optimizing your budget and marketing strategy in a modern-day downturn?
Invest More in Digital Marketing
In this modern age, you need to focus on the marketing channels that are most beneficial to your business and cut the ones that aren’t gaining you a decent ROI.
While traditional marketing forms may work in some industries, it’s best to embrace online and digital marketing to get the best results.
When it comes to digital marketing, we already know it’s by far the most rewarding form of advertising. This includes marketing funnels, SEO, PPC, social media advertising. The more you can advertise online, the better. Take note of how Kelloggs managed to significantly boost its market position by using more aggressive marketing tactics and apply a similar approach to your digital marketing budget.
Analyze Your Target Audience — Adapt Strategy To Their Reaction
You should also analyze your digital marketing strategy and target audience to ensure your marketing dollars are well spent. You should examine all the data to figure out how your target audience reacts during a recession or economic downturn — and adapt your strategy to accommodate their reaction.
Focus on Loyal Customs
View loyal customers like your savings account — you invested in these customers for so long, and during turbulent times they can act as your business’s safety net. Attracting new customers is notoriously tricky during a downturn. While it’s still possible, it’s best to gear your digital marketing efforts mainly towards your existing customer base.
Offer More Discounts
As a huge number of people will be employing cost-saving measures to their usual spending habits, most people will be looking for a better deal on all products. Offering discounts, coupon codes, and promotional deals is a great way to match the consumer mindset of looking to save money.
Re-establish Your Products Value
As an alternative to offering discounts, you should try to look at how you’re currently advertising your products or services and aim to strengthen your brand’s message. Re-establishing your product’s value helps consumers still view your products as essential and worth the price tag, as opposed to looking for a sizable discount at your expense.
Navigating Your Business Through a Crisis
At the time of writing, the world is at a standstill. While there are some businesses that seem to thrive in a recession. This is proving to be a challenging time for many businesses. But if you follow the right guidance and adapt your business’s marketing and overall strategy to the current climate, you can use the current crisis to improve and strengthen your business — helping you to see massive rewards for your work in the long-term.
For entrepreneurs who have been forced into managing their team remotely, check out our guide on what tools to use to make your online management seamless. For people struggling with working from home, check out our guide to be productive and focused when working from home.
Written by Lewis James