Previous economic recessions like those of the 1980s and 1990s were called business cycle recessions. The world economy faced inflation, central banks increased interest rates, and investments were low. The global financial crisis of 2008 led to a depreciation of the US mortgage market that led to a banking crisis.
The Covid-19 recession is different. The pandemic has affected 188 countries, negatively impacting their economic activities, including consumer spending. As the virus spreads through towns, communities, and nations, businesses struggle to grow or stay afloat.
After the World Health Organization (WHO) declares the pandemic over, governments and businesses alike will require a restructuration to the “new normal.” The new normal promises to bring substantial changes in the way we live our day to day lives and the way we conduct business.
Marketing Spend during an economic recession
On top of that, consumers tend to be conservative with what they spend and where they invest their money. If a business does not provide a product or service deemed “necessary,” such as food and household items, they are likely to see their sales drop. This will require them to cut costs, reduce their prices, and postpone any plans of growth.
When businesses have control of the money that goes out but not coming in, the most immediate response is to be more conservative of their expenses and focus on generating short-term revenue rather than creating sustainable projects in the next six months to a year.
While cutting spending on services might be the right thing for your business during the Covid-19 economic recession, indiscriminately cutting spending may do more harm than good during and after these trying times.
To make sure you are allocating your budget the right way, consider your customers. As everyone struggles to make ends meet, you may need to reposition your brand in such a way that your core clientele still feels compelled to spend their money with you.
An incredibly effective way to put your customers first is to consider their changing needs. Organizations that prioritize their customers’ needs are in a better position to adjust their marketing strategies and product and service offerings.
Investing in digital marketing allows businesses to shift their focus according to current marketing demand and are more likely to prosper during and after economic recessions.
Value digital marketing during tough times
Now more than ever, digital marketing is vital to any business’s success. It is an investment, and without it, your target customers would be unaware of your brand and would not know why you are superior over your competitors.
Without a healthy marketing budget, it would be almost impossible to raise your brand awareness, generate quality leads, and land more customers.
4 Reasons to keep up your Marketing Spend
The Covid-19 public health crisis has led to a decrease in shopping and has influenced all businesses to focus their marketing efforts online. 90% of marketers estimate their organizations will increase their digital marketing budgets in 2021. Besides, 80% of them expect that their attention will focus mainly on lead generation to attract more quality leads.
Your organic search efforts (SEO) are a consistent, year-round investment. If you want your business website to consistently rank for your targeted keywords, your marketing team will need to allocate sufficient resources to make sure your site can be found on search engines.
While a recession often means consumers generally have less money to spend, the truth is that other consumers can purchase as long as you continue your optimizing your website to feature on search engine search results (SERPS).
On the other hand, paid search advertising is an incremental process in which a marketing team is required to increase their ad spend to reach new, potential customers.
A successful digital marketing strategy can do wonders for your business during times of economic prosperity and economic crisis.
Among these benefits are:
- Boosting your businesses’ visibility,
- Increasing your business’s marketing share,
- Increasing the number of visitors that visit your website,
- Grow your sales revenue,
- Boost the number of returning customers, and
- Generating greater profits.
We will breakdown these benefits into the four primary reasons why investing in your marketing spend is the right decision for your business.
Digital Marketing is cost-effective
Digital marketing is more affordable, and it gives you access to every potential customer that fits your buyer personas.
With a sound marketing team, you can research to identify your business’s current strengths, weaknesses, and opportunity areas that you can use to increase your organization’s overall appeal.
Digital Marketing maintains your brand in mind
The leads you worked hard to generate are more likely to remember who you are if you keep investing your business’s marketing budget on remaining visible and at the top of mind for your target audience.
Generally, customers are more likely to trust you with their money if they are familiar with your business brand.
To make sure your clientele remembers who you are and is willing to invest their money in your business, your marketing budget will help you survive an economic recession.
Online Marketing is measurable
Digital marketing makes it easier for businesses to measure their progress. By measuring your progress, your marketing team can accurately estimate your marketing ROI through the use of various software.
Therefore, during a recession, you can test different strategies, tactics, and approaches and objectively evaluate, which generates higher results and how to adjust these to appeal to your customers.
Remember that an effective marketing strategy is a long-term investment – most consumers will not be interested in purchasing from your business after seeing one of your online advertisements.
This indicates that during an economic crisis, increasing your marketing spend may not be viable for every business. However, cutting your marketing budget is not an option if you aim to grow your business. Instead, make sure to spend it more effectively.
Remarketing can help you retain more customers
One of the most common problems for businesses is selling during an economic recession. To ensure you can overcome this hurdle, create a solid value marketing plan that allows your organization to provide as much value as possible to retain your customer’s loyalty.
If your business has had trouble gaining new customers from leads initially interested or encouraging existing clientele to purchase their initial investment, then your marketing strategy should rely heavily on remarketing.
Simply put, remarketing is an advertising strategy that aims to attract potential customers who have previously interacted with your business but did not buy. You can choose to remarket through various channels: through social media, Google search ads, display ads on websites reasonably related to your industry, or YouTube video ads.
Stay on top of your competitors
Crafting a digital marketing plan and executing it to provide optimum value to your potential customers and existing clientele will communicate strength and stability about your business.
During an economic recession, when most businesses struggle to grow, being perceived this way will reassure your potential customers that the quality of service you provide remains the same. In other words, your business is strong enough to survive and even thrive during these hard times. This creates confidence for consumers to purchase from your organization rather than buying from your competitors, who may be struggling to provide quality services.
Investing in Marketing is always an asset
During tough economic times, your focus should gravitate to your current customers and generating new ones.
By catering your marketing strategies to accommodate the changing needs of your clientele and the market, you will ensure that your business is following the current instead of going against it and fighting to make a sustainable profit.