5 Key Principles of Marketing During a Recession
Inflation is at an all time high, energy prices are dangerously surging and a global recession is looming. There is a huge responsibility on marketers to help businesses to stimulate growth and help consumers to make the right choices given their new financial circumstances.
So we’ve identified 5 principles to help brands not only navigate this period, but thrive.
1) Capture demand that exists now
It is essential to maximise existing demand before pushing more people into the sales funnel. Bain & Company reported that ‘a downturn is when customer loyalty is either gained or lost’ and market analysis of the last five major recessions found that maintaining strong experiences for current customers trumps efforts to bring in new ones. With increased competition, brands should prioritise increasing conversion rates for in-market and existing customers.
Brands should take advantage of platform automation and predictive analytics. Those that utilise broader campaign types such as Google’s Performance Max and broad match, as well as value based bidding, have been found to drive 20% more conversions at a similar CPA. Incorporating first-party data into your strategy and evaluating the on-site experience through advanced user testing and research will help to drive repeat visits
2) Don’t go dark
Marketers are often tempted to abandon established best practices and marketing spend. Staying the course, however, offers much greater reward. Data shows that it is important to maintain marketing investment during times of financial pressure for both protecting share of voice and staying more resilient to price elasticity.
In order to bring efficiencies in a recession, brands should consider the full funnel to see both long and short-term results. Leverage the power of digital video to maximise investment, and diversify the digital channel mix to drive incremental reach. YouTube can be a very effective channel during a recession, as it offers diverse formats and targeting options that can help drive immediate action, while also helping to position the brand long-term. Influencers can be just the right approach to channel diversification and incremental reach.
3) Highlight your relevancy & value
The pandemic has accelerated consumers’ needs for honest and direct brand communications. There is a trust issue around brands utilising a blanket approach to communications and inauthentic messages. To combat this, you can emphasise the necessity of your products and services by focusing on appeals such as time savings and convenience. Brands should avoid one-size-fits-all messages, and personalise communications to resonate with a diverse audience and highlight your multi-faceted value. Influencers can offer both authenticity and diversity of message to resonate with various consumers’ needs. Automation through DCO is another route that can help with personalisation of messages using real users’ data signals.
4) Redefine the audience opportunity
Changing category norms impacts audience consumption and shopping behaviour, and it’s critical to track how customers reassess priorities, reallocate funds, switch brands, and redefine value. Of course, given the recession, value-seeker audience groups usually grow significantly. Pre-existing trends toward reduced materialism, commitment to sustainability, higher expectations of corporate social responsibility and other changes to people’s thoughts and behaviours can impact standard audience profiles during challenging economic periods.
5) Measure to drive business growth
Maintaining or increasing spend during a recession will mean more pressure to justify media investment, especially for mid and upper-funnel tactics. Brands need a 360 approach to measurement to understand the incremental impact from digital media. In fact, brands that integrate multiple sources have been found to drive +16% higher incremental revenue and are 4x more likely to exceed business goals, and increase revenue and market share. This means ensuring you have a layered approach to measurement, from econometrics to inform overall budget splits to attribution and lift studies to inform cross-channel and in-channel decisions. It is important to experiment with different measurement solutions, invest in the right tech, and embrace a test and learn approach to drive overall performance.