Key marketing strategies during a market slowdown
About 40 per cent of businesses will cut down on expenditures if the next recession hits, and about three per cent will do nothing. If you’re ill-prepared, then check these tips on how to market during a recession
A recession can be a difficult time to deal with. Almost every business suffers during a recession, and some even go bankrupt. There have been 19 major recessions through US history, and the next one might be just around the corner.
According to a report, about 40 per cent of businesses will cut down on expenditures if the next recession hits, and about three per cent will do nothing. If you’re ill-prepared, then check these tips on how to market during a recession.
Rule #1: Don’t stop marketing
As odd as it may sound, more marketing during a recession may mean more sales. Harvard Business Review found that cutting down the marketing budget is a significant reason businesses fail to weather the storm.
The concept is simple; businesses shut down during a recession, forcing buyers to look for alternatives. You can attract those buyers by spending more on marketing and appearing as a reliable option.
There might be a reduction in your revenue, but it’s usually temporary. Once buyers get back their buying power, they’ll remember you and turn to you to make purchases since you’d be on their mind.
Rule #2: Introduce new concepts
According to BBC, a recession can be an excellent time to start a business. Similarly, it can be an excellent opportunity to introduce new concepts.
You’ll see several such examples – GM started in 1908 during a recession, Burger King introduced delicious patties during the crisis of 1953, and more recently, Tesla broke records during the pandemic.
The key lies in studying your consumers and paying attention to their needs that change during a recession. Users don’t stop buying altogether. Instead, they start looking for reliable and more affordable alternatives that you can offer.
Rule #3: Change your marketing strategy
Recession can cause changes in customer buying habits. As a business, you must keep an eye on customer behaviors and change your marketing approach accordingly.
Emotional engagement can prove to be very beneficial, as highlighted by the World Advertising Research Center. Campaigns that form an emotional bond can prove to be more rewarding than discounted offers.
Change your branding according to the mood of your clients, and make sure to send a positive message.
Rule #4: Seek help when possible
While it might take a little while, most governments eventually realize the need to help the economy by offering stimulus packages and incentives to businesses.
Australia, for example, evaded the worst impacts of the 2008 recession by offering great stimulus packages, including a $4 billion “Nation Building and Jobs Plan”.
Such programs can be very beneficial for businesses as they can be utilized to find debt relief, save money for marketing, and create new products or services.
Rule #5: Don’t forget your existing customer
A recession might not be the best time to concentrate on new customers. Instead, use more of your resources to keep your existing buyers.
It costs five times more to attract and win a new customer. Businesses fail during a slump not because they're unable to win new customers but because they end up losing existing clients.
Maximise every marketing dollar by taking steps to maintain your existing market. Pay more attention to campaigns that stimulate loyalty and repeat purchases.
Try cross-selling and up-selling and study consumer behavior to identify clients with more lifetime value, i.e.: buyers who are more likely to spend on your business.
Offering a reward program can also prove to be very rewarding during such times.
It’s harder but possible to make money during a recession. Optimistic marketers end up winning no matter what. Don’t give up and start planning now.
Dr Kiran Nair is an associate professor at Abu Dhabi School of Management, Abu Dhabi. Views expressed are his own and do not reflect the newspaper's policy.
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