Surviving The Economic Downturn of COVID-19
Our businesses are all facing challenging times as the economic impact of Coronavirus starts to bite. And when faced with challenges like this, it’s time to turn to The Godfather for that inimitable advice:
“Go to the mattresses.”
In other words, prepare your local perth business for the long haul. Get your metaphorical mattresses ready for your company soldiers to sleep on while they wait for the battle.
We need to work smarter, and be ready to tackle the challenges ahead.
market downturn have a nasty habit of destroying unprepared or ill-equipped businesses. In the last one, more than 400,000 small businesses went bankrupt or permanently closed. If you want to prevent your business from suffering the same fate, you need to craft a recession marketing strategy now—not when the stocks dip, not when a recession is formally announced—now. That way, you’re ready for pivots and budget shifts when the market slides.
This may be the first time you’ve had to keep a business afloat during an economic downturn. So, to help you out, we dove into the most successful recession marketing strategies and distilled them into five main rules for you to follow:
Tip 1: Dont Cut Your Marketing Budget
When a marketing downturn or recession hits, marketing budget is one of the first thing that business owners are tempted to stop. This is one of the biggest mistake small-business owners make. According to Harvard Business School, stopping the marketing spend on a downturn will only help on a short term, And once the downturn is over your business will emerge from the downturn weaker and much less profitable.
Maintaining a brand that customers trust is one of the best way to reduce risk when recession hits. That’s why, every recession cycle, the businesses with strong brand awareness and reputation have come out on top. and the businesses who decided to slash their marketing budget gets crushed.
Cutting the budget for marketing during a recession is a gut reaction many inexperienced business owners (and even experienced ones as well) will make. If your competitors are cutting budgets, you’ll see an even greater long-term return on your marketing investments.
Instead of making deep reactionary cuts, objectively look at where you’re spending money and what kind of return you’re getting on that money. The key word here is objectively.
Tip 2. Focus On Keeping Your Existing Customers
Out of sight means out of mind. You need to keep in touch with your customers or you risk losing them. And it is always cheaper to retain an existing customer than acquire a new one.
- Marketing automation is the lowest cost, easiest, and most effective way of keeping in touch with your customers. I’m not talking sending automated email marketing spam, nor am I talking about broadcasting cold calling messages to get new customers. You need to be sending out personalised, contextualised, targeted messages to existing customers who want to hear your news. You need to be keeping in touch with your customers at every touchpoint in their digital journey through social channels, through exploring the web. And doing this systematically and automatically will ensure the job gets done, and will free up your more expensive human talents to deliver creative campaigns that will add even more ROI.
- Content production is an essential ingredient for your tactical marketing campaigns for keeping in touch with your existing customers. Share the innovations that you are currently making that differentiates your offering from your competitors, and promote your good news stories in terms of awards and client wins.
- Getting more social means engaging in conversations with your existing customers. LinkedIn, Twitter, Facebook: these are places where you customers are reviewing your products, discussing their purchasing decisions, exchanging views on your business. Create a low-cost plan for reaching customers at every point in the social media funnel. Use these tools to listen to your customers, hear what they’re talking about, learn more about your market. And remember it isn’t about advertising – your contributions to the conversation need to be valuable and appropriate.
Tip 3. Track Everything
If you don’t measure, then you can’t manage. And if you’re not managing, then you could be pouring money down the drain.
Digital marketing allows for more precise, specific, and measurable campaigns. This leads to better, more quantifiable results than traditional advertising campaigns—and it all starts with the right tracking and analytics.
Make sure that your Google Analytics is setup properly, setup call tracking if you have to, you can also hire a digital agency to help you combine all of the data. Tracking the data effectively helps you identify what’s working and what’s not.
If marketing budgets are tight, then knowing what works makes it easier to make the decisions of where to invest your cash.
Tip 4. Segmenting Your Customers
Naturally, consumers reduce their spending, and set stricter priorities, during recessions. An earlier HBR study found that traditional marketing segmentation approaches are less useful in a recession. They identified four new “psychological” segments based on consumers’ emotional reactions to a negative economic climate, four categories of expenditure, and then mapped how each new segment managed future purchases in each category of expenditure.
People change as the world around them changes. What your target audience needs in one decade may not be true in the next one. Keep the same thing from happening to you by really diving into your target audience and finding out their motivations and behavior trends during an economic downturn.
Marketing Downturn Pro Tip: The trick to successful advertising during a recession lies in consumer psychology and emotion. A recession is a trying time for most consumers, and there’s an undercurrent of fear, worry, and stress beneath the surface. By tapping into and appealing to the emotional side of consumers you have a better chance of connecting with and persuading them.
Tip 5. Test, Learn, and Test some more.
You can’t MAKE people alter their spending habits. The best you can do is figure out the formula that nudges them further and further along the buyer’s journey. The only way to do this is by tracking your efforts, tweaking your campaigns, pivoting your strategy when necessary, and repeating the process.
You will need to be nimble and creative. Measure your success, and learn from the test.
- Experiments should be quick, cheap, and easy to deliver.
- If it works, then well done, and more of the same, please.
- And if it doesn’t work so well, then kill the experiment and move on. No harm done. Be quick and be ruthless. You will have tested something, learned from it, and moving on to test something new.
If you’re worried about your business strategy during a recession or need help getting all your ducks in a row, we are more than happy to help you figure it out. I do recommend you contact us ASAP—once the recession actually hits you’re going to have a lot on your plate.