Opinions expressed by Entrepreneur contributors are their own.
When the economy takes a downturn, and the word “recession” is uttered in executive offices across the country, there is often one standard response: cut the budget. For many companies, the first department on the chopping block is marketing. This is the one area of businesses where results may seem intangible, and executives could assume — at their peril — that slicing away some of the perceived marketing fat will make little difference to the end result. The truth could not be more different.
You can switch it off — but you shouldn’t
Advancements in marketing tools have made marketing budgets even more at risk in times of recession. Before digital marketing was the norm, businesses were often tied into lengthy and expensive-to-kill print and radio campaigns. With digital marketing, though, switching off the campaign is as easy as one click.
The flexibility and cost-efficiency of digital marketing are some of its greatest benefits, after all. You could go from spending $100,000 a month to zero in the blink of an eye. For a small or medium-sized business, that could be game-changing. It could also be game-ending in the medium to long term.
Switching off your digital marketing efforts in a recession would be completely counterintuitive because it is during this very time period that more people will be spending time online than ever before. Sure, they may not be spending money on nonessentials the same way they were, but nothing lasts forever. Not even a recession. By completely removing yourself from the digital market, you nearly guarantee that, when your customer is ready to spend again, they won’t have your brand in mind.
Market smart, not hard
The aspects of digital marketing we enjoy so much (its flexibility and cost-effectiveness) make it the one budget you should not cut during a recession. Instead, consider narrowing your targeting strategy and confirming that you are using that budget to its best effect. It will pay you back in dividends when the economic noose starts to loosen.
Even if you aren’t making your presence known online, your competitors are. And that means that they’ll be at the forefront of your target audience’s minds when the time comes to buy.
For ecommerce businesses, emphasizing digital marketing during a recession should really not be a question. More than ever, consumers are shifting to online shopping, and even if they aren’t splurging on luxury items, they’re still buying essentials and even treating themselves. Ecommerce businesses cannot afford to not have a consistent digital presence.
Another important reason to maintain your digital marketing efforts during a pandemic is the long-term value of brand awareness. When money is scarce, consumers are careful how they spend their dollars and who they spend them with. Customers will want to be sure they are buying from reputable and well-known brands, and for many consumers today, reputation and brand awareness are built in the digital realm.
Speaking from experience
I started my own business in 2008 — a year which, for many, brings back difficult memories of extreme financial hardship. And yet, my company thrived. I invested in marketing — and my customers responded because they knew the recession would not last forever and they couldn’t put their lives or businesses on hold.
Digital marketing is the one channel that provides easy-to-validate results. Keep in mind, the value of the data you get from your marketing efforts is equivalent to the level of attribution tracking you have in place. Having that clear visibility allows you to channel your efforts in the right direction, which is even more critical during times of economic stress.
Best practices for marketing in a recession
To ensure you’re getting the most out of your marketing dollars in trying financial times, there are a few guidelines you can follow:
Focus on holistic attribution: It’s vital to ensure that you really know which digital channels are working together to bring in sales and brand awareness. Otherwise, you may end up pulling the wrong levers and wasting precious money.
Personalize to maximize conversions: A recession is not the time to cast wide nets out in the hopes that you’ll catch the right fish. You’ll need to ensure you are narrowly targeting just the right group of people, and continuously checking in with your attribution data to fine-tune the specifics of your campaigns.
Encourage repeat business through brand loyalty: Attracting new customers is important, but keeping the ones you already have is equally so. Focus on providing amazing customer experiences to build brand loyalty during the toughest of times, and you’ll see repeat business as a reward when the sun comes out from behind the clouds.
It is entirely possible to market your way through a recession, and marketing budgets should definitely not suffer during trying economic times. Market strategically, track attribution holistically, and make the most of the changes that come with global financial challenges. The recession will come to an end, but your business doesn’t need to end with it.