Marketing in an Economic Downturn

The International Monetary Fund states that, “Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook.” We understand that when facing challenging economic periods, one must plan for the worst to keep their business stable and moving forward. However, while recessions present challenges, they also create opportunities. Companies that stay consistent and strong in their marketing and branding throughout challenging times, have proven to win bigger in the long run. In 2008, Netflix weathered the recession by offering subscriptions through alternate devices, like Xbox, growing their market share by partnering with similar companies. In the same recession, Mailchimp offered free subscriptions and has continued to grow and expand on those accounts. Eyeglasses company, Warby Parker, noticed a large gap in easy access to designer frames and was able to thrive by solving those pain points for their clientele.

No two recessions are the same. Which is why examining the past isn’t always the best guide for the future. Each downturn has its own variables that create this phenomenon. Most often they are driven by fiscal and monetary policy, shocks to the economy, such as unemployment and negative growth in Gross Domestic Product (GDP) and income.

“Growing inequality between and within countries is the ongoing legacy of COVID, war and uncoordinated policy action. With inflation soaring and real wages falling, the global cost of living crisis is hitting the most vulnerable hardest. As policymakers aim to control inflation while minimizing the impact on growth, they will need to ensure specific support to those who need it most. The stakes could not be higher,” says Saadia Zahidi, Managing Director at the World Economic Forum.

Some of Your Competitors Will Make the Wrong Marketing Choice: That’s Good for You

Statistically speaking, some businesses will feel they have no choice but to pare down their marketing efforts. However, this creates a cycle of decline and potential failure as a business. Here’s why; when a company decides to cut advertising expenditures, brand recognition declines. As a result of low brand visibility, sales decline. Reduced revenues further diminish marketing budgets and the cycle continues to downgrade and impact the bottom line.

Recessions Are a Good Time to Optimize Your Business Processes

Many companies seek to reduce overhead by cutting staff and/or services during an economic downturn. As with decreased marketing, this can create a cycle of decline, as well as the perception that your company may be in trouble. Rather than cutting staff or services, you can examine the challenges your organization is facing and optimize performance by cutting redundant processes, identifying ways in which automation or digital data transformation could help you improve any inefficiencies, and aligning your entire staff around sales and customer service. While you can’t predict the future, you can assure people that you are confident in the foundation of your business.

Alter Your Messaging to Address Your Customers’ Concerns

With more market share available, it may be tempting to rush to push your current marketing initiatives. However, you may need to alter your current messaging with appropriate sensitivity to the pressures your customers are experiencing, from inflation to increased interest rates. Messaging with added focus on empathy is a strong catalyst to connecting with prospects. Market to your customers’ concerns and show your agility in shifting times. If you can offer innovative financing or payment plans that make it easier for customers to do business with you, this is a good time to do so, and include that in your messaging.

We have seen many patterns emerge during these downturns that we can take advantage of; Through many recessions we have seen that homeownership is one of the few assets that retains and often grows its value. For companies in the home improvement, remodeling or renovations industries now is an excellent time to speak to the value that comes in updating or improving the structure, layout, and design of one's home. Show your clientele that investing in their homes is one of the best strategies when times are stagnant. According to Harvard University’s Joint Center for Housing Studies, Americans are expected to pour a record $316 billion into home remodeling this year, up from $296 billion a year earlier. With low
housing inventory many people are remodeling their existing homes as a less expensive option, creating an opportunity for you.

We develop key messages, using your customer’s preferred language, for all the benefits your company offers, including products, services, positive aspects of working with your team, as well as the events that trigger your potential customers to search for your offerings and the keywords they use to search for you.

Examine and Test Your Audiences and Reach

Not only is it essential to keep your marketing collateral and brand image in alignment with your company values and current times, but you must examine each target audience you are reaching and how. Are you focusing on your most lucrative sector? Now is the time to reallocate your marketing dollars where possible. If your target market includes a higher-end demographic, you will want to concentrate on them since they are not as highly impacted by recession or interest hikes. Conversely, you may want to cast a wider net and market to different age demographics or zip codes. Finding the best balance involves market testing and use of alternate media channels. Many traditional channels are proving to be less effective for advertisers than before. As consumer preferences change, new opportunities to engage are emerging, and being able to navigate those changes is key.

Your Company Is Unique: Your Marketing Should Be, Too

Each company will need to define the tangible attributes contributing to their successful brand personality and present it to their clients in a compelling way. You’re probably thinking, this all sounds great but how can I get there?

Snow B. Designs can help you find the right combination of avenues. We can breathe life into your brand, update your messaging, activate your campaigns in new channels, and test tactics that can increase your market visibility, generating more leads and sales. (For a glimpse into how we help you win hearts and minds for your company, see this Case Study.) It is our priority and pleasure during these shifting times to help to set your business on a path for optimal growth now and in the future.

Above are a sampling from a rebranding process; including naming, positioning and logo exploration.