A big part of marketing is expecting the unexpected and being able to navigate through murky, unknown waters. While sometimes economic recessions are predictable, no two recessions are the same. This means that a company can do its best to prepare and plan ahead for an economic recession, but there is no way to be prepared for every hit that’s coming.
In order to come out the other side of an economic recession virtually unscathed, it’s important to plan, execute, reassess, re-adjust, re-execute, and continue that pattern until an economic boom is on the horizon.
That being said, there are a few marketing tactics that can help businesses during a lower-income quarter.
Segmenting Consumer and Consumer Interests
Prior to developing an adequate marketing strategy, it is important to first analyze the consumer or customer base that your company is targeting. Consumers can be divided into categories based on income levels, spending habits, and the different ways that your product or service might benefit them.
Understanding the consumer base is necessary so your marketing tactics are reaching the right audiences in general. It will also facilitate better target marketing towards consumers who will still continue to purchase from your company during an economic slump. This does not necessarily mean that you are always leaning towards consumers in high-income brackets. You must take their finances into consideration and adapt to their needs.
In addition to segmenting the consumer base, it is also important to segment products and services which the company offers; examples of such categories are essentials, treats, postponables, and expendables. This will allow your company to market essentials in a unique way during a recession, whereas many consumers might avoid treats if they are on a tight budget.
Following these two analyses, a company can match it’s consumers to the products and service segment that those consumers are most likely to purchase during hard economic times.
Analyzing Current Marketing Resources and Readjusting
Upon determining consumer and customer habits, next in line is to transform the company’s current marketing plan into one that is both more suitable and more sustainable during lower-income quarters.
It is also important to thoroughly analyze the current economic climate in order to better predict how long the recession is going to last. This can aid in creating a financial resource distribution plan to last the duration of the economic downturn.
Social Media Marketing
During economically challenging times, companies can rely more on social media for the bulk-share of marketing strategy as it is a more cost-effective way of marketing to a large number of people.
For example, a study on the cost-to-audience return on investment found that on average, in B2B, the same monetary investment will land approximately 93% more impressions (social media ad views) when compared to traditional marketing tools such as television commercials and newspaper advertisements.
When compared to traditional marketing, social media can be viewed as a more cost-beneficial form of marketing to reach the desired consumer segment. This is through the use of targeted advertisements which ensures that consumers who are more likely to buy a certain product or service, are more likely to see an ad for said product or service.
A major benefit to social media marketing is the ability to flip the script on practically a moment’s notice when it comes to platform usage. For example, if an ad is performing better on one social media channel when compared to another, you can pause that campaign with the touch of a button.
This allows for a quick reallocation of marketing resources when an ad is underperforming; saving the company money which is of the utmost importance during a lower-income quarter.
Uncovering Alternate Methods to Generate Income
Sometimes recessions or market crashes force businesses to close for an undetermined amount of time. For example, during the current COVID-19 pandemic, many businesses have been forced to close as it is not safe to keep the doors open. Not only does this impact the current quarterly earnings, but it can have a ripple effect and create strife during proceeding quarters due to a loss of customers or consumers.
However, times like these present excellent opportunities to be resourceful and create brand notoriety to existing and potentially new customers. Empathetic marketing is a great resource during times of economic downturns as it provides marketers with a window into a consumer’s potential strife.
Another way to generate income is by offering discounts to current customers. If you are still able to sell anything from your company, than current customers would appreciate this. They could also pass along this benefit through a referral service.
Advertise the availability of gift cards. Customers can purchase gift cards, either for gift giving or to support the company during this time. That way, the money is earned during the time of crisis and the goods will be delivered once the market is more stable.
Utilizing Channels to Keep Consumers Engaged
While some consumers may be less likely to purchase a product or service from a company during an economic recession because of a lack of personal financial resources, it is extremely important to continue to foster a positive relationship with those consumers in order to retain them for when the market bounces back. After all, it is more efficient to retain current consumers than it is to look for new ones.
This can be accomplished through social media engagement, give-aways, and positive PR initiatives. This will remind consumers that the company cares about their personal well-being. By fostering a positive relationship during hardship, consumers are likely to have a more positive view of that company and thus continue to purchase products in the future.
In addition, utilizing social media to keep consumers engaged can be fun and exciting for both parties. It is also an excellent time to build anticipation for a new product or service, which can aid in generating financial benefits once the economy has recovered.
Another way to develop positive consumer relationships is to take some of the funding that would traditionally be allocated to marketing and use it to help a smaller or local firm or charity. This will generate a sense of goodwill with both existing and potential consumers which can help to retain customer interest during a time when they may not be able to purchase products and services.
Planning for the Future
While it can be difficult to anticipate the oncoming of an economic recession and to adequately create a contingency plan that perfectly suits a time of economic hardship, a key in future success is to use the past as a benchmark to plan, prepare, and eventually execute a contingency plan.
During a time of recession, remember to collect as much data as possible regarding consumer behavior, advertising to sales conversion rates, and the impacts on the company’s image during economic crises. This information can then be used to create an Emergency Response Plan that can be adaptable to future low-income quarters and save plenty of pain and strife upon the initial future onset.
While it may not be fun to work through an economic downturn or a low-income quarter, these times can easily be used as opportunities to explore different marketing tactics such as social media and consumer engagement, as well as create a plan for the future.
