A recessionary environment can be a make or break a business. Note, some of today’s most successful companies were founded during recessions, such as Google, Disney, Uber and Air B & B. However for every company that thrives during a recession, there are many more that fail.
One of the key reasons that some businesses succeed while others falter is how they handle their marketing spend during these difficult times. When a recession hits, businesses are quick to cut marketing budgets as they seek to reduce costs. However, this can be a mistake.
Recessions provide opportunities for businesses to reach customers who may be more price sensitive and receptive to new offers. Instead of cutting marketing spend, businesses should focus on reallocating their budgets to more efficient channels and developing interactive content that will capture the attention of customers who may be spending more time at home. Below are three ways businesses can reach and engage customers despite a market slowdown:
1. Develop interactive content
Customers are spending more time than ever online, so it’s important to develop content that is interactive and engaging providing valuable information or entertainment. In a recession, ROI becomes even more important, so businesses should focus on creating content that will drive leads and sales.
Traditional paid advertising (PPC) can be expensive and is subject to ‘banner blindness’, which is when users tune out online ads. Interactive content, such as quizzes, polls and surveys, can be a more effective and cost-efficient way to reach and engage customers.
2. Target recession proof industries
A recession doesn’t impact all sectors equally. In fact, some industries have seen tremendous growth. Healthcare, for example, is an industry that is relatively resilient to economic downturns. As people age, they require more medical care, and government spending on healthcare tends to increase during periods of economic hardship.
Other so-called “defensive” industries, such as food and beverage, household staples and personal care, also tend to do well during recessions.
3. Focus marketing channels that provide the best return
When businesses are cutting costs, they often reduce their marketing spend across the board. But not all marketing channels are equal. Some, such as paid search and social media advertising, can be very effective in driving leads and sales but can also be expensive.
Other marketing channels, such as email marketing and content marketing, can be less expensive and just as effective in reaching and engaging customers. In a recession, businesses should focus on allocating their marketing budgets to the channels that will provide the most ROI.