This time last year pandemic restrictions were starting to ease, and markets were beginning to see recovery. In 2023, a looming recession, rising inflation, Silicon Valley woes, and declining customer spend are causing the next great degree of uncertainty. For many businesses, it’s tempting to cut marketing budgets back, but data shows that a reduction in marketing spend during a recession allows your competitors to swoop in and steal your business – in both the short and long term. In fact, smart marketing during a downturn can position a business for success once the economy rebounds.
We hear from TEAM LEWIS experts Thomas Skelton and Tina Ahmed, on the importance of marketing strategy in the current economic climate and why brands should leverage performance marketing to drive results.
THE CURRENT ECONOMIC LANDSCAPE
Recessions negatively impact businesses on many fronts, from slowing down sales and operations to reducing cash flows and increasing borrowing costs. They can also spark feelings of fear, uncertainty and even panic among stakeholders. A recent study conducted by BrandWatch revealed that 94% of conversations in APAC around the cost-of-living crisis were negative, with sadness being the number one emotion, accounting for 49% of mentions.
These high emotions can fuel marketers and brands to give in to fear and make panicked knee-jerk reactions, but rather than slowing down on marketing spend, brands need to see this time as an opportunity to stand out amidst the competition and gain market share. Smart companies will learn where to cut and where to maintain their spend as the recession takes hold. Historically, companies that deploy a mix of defensive moves to reduce costs while offensively investing in growth strategies, like marketing, will most likely not only survive but thrive in the recessionary and post recessionary months ahead.
It’s not about spending your way out of a recession or, conversely, that you need to cut all budgets because of cash flow. There is a more nuanced approach that can allow companies to cut the operational fat while building the branding and focusing on key initiatives to drive short term return. Balance is the key.
THE IMPORTANCE OF A CLEAR STRATEGY IN BUILDING YOUR BRAND
To succeed during a recession, brands need to have a clear strategy and continue with marketing and PR initiatives. However, before embarking on this brave course it’s essential that business objectives,brand and marketing strategies are aligned.
Thomas Skelton, Director of Corporate Strategy for TEAM LEWIS APAC added, “A clear strategy helps brands stay focused on core purpose and identity while guiding actions and decisions. During a recession, when businesses may be tempted to deviate from their brand’s core values or chase short-terms gains, a clear strategy serves as a compass that keeps the brand on track and ensures consistency in brand messaging, positioning, and customer experience.”
Recessions can be challenging times for brands, but they can also present opportunities. Here are five key strategies businesses can implement to stay competitive and thrive.
- Be close to clients and consumers: It’s crucial to understand your target audience and their changing needs and preferences during a recession. Conduct market research to gain insights into your customers’ behaviour, purchasing patterns and pain points. Use this information to fine-tune your marketing strategy.
- Firm control over brand image: It’s important to invest in building and managing your brand image, even during challenging economic times. Those brands that have firm control over their brand image will maintain existing customer trust, differentiate themselves from competitors, effectively manage their reputation and be ready for future growth when the economy rebounds.
- Out communicate the competition with clever content: Tighten your messaging to create stricter criteria for storytelling, ensuring your marketing only delivers the most compelling stories that convert.
- Revisit your messaging and keywords: Adapt how you communicate by aligning your messaging and keywords with the current economic climate and changes in consumer behaviour. Be mindful and avoid appearing tone-deaf or insensitive to the economic challenges consumers are facing. By aligning your messaging with the current needs and preferences of consumers, you can better address their concerns and offer relevant solutions that meet their needs.
- Make sure you are being seen: Realign your content strategy to maximise your impact (e.g, update content, identify the right cadence and volume, optimise your product process).
DRIVING RESULTS AND ROI THROUGH PERFORMANCE MARKETING
While dialling back marketing spend may seem to make sense for short-term budgetary concerns, marketers focused on mitigating the impact of a recession must focus on analysing data and investing in effective performance marketing strategies to drive results and ROI.
Below are five ways performance marketing helps businesses navigate through the recession and achieve meaningful results.
- Targeted and measurable approach: Performance marketing allows you to be highly targeted in your marketing efforts, reaching the most relevant audience and optimising their marketing spend. By leveraging real-time data and analytics you can quickly identify what is working and what isn’t and make data-backed decisions to optimise performance and maximise results.
- Flexibility and agility: During a recession, market conditions change rapidly, and businesses need to be agile and adaptive in their strategies. Performance marketing provides you with the flexibility to quickly adjust your marketing campaigns based on real-time data and market trends. For example, if a certain message isn’t performing well, you can swiftly modify the message to better resonate with your audience.
- Cost-effective results: Cost efficiency is crucial during a recession when businesses may face budget constraints. Through continuous monitoring and optimisation of your campaigns, you can ensure that your marketing budget is allocated to the most effective channels and tactics, resulting in a higher ROI.
- Customer-centric approach: Performance marketing allows you to better understand your customers preferences, behaviours and needs and tailor your marketing messages accordingly. It also allows for remarketing and retargeting strategies, enabling you to re-engage previous customers and nurture ongoing relationships.
- Innovation and creativity: Through performance marketing strategies you can experiment with different marketing channels, messaging and tactics to find the most effective approach. This iterative approach fosters innovation and creativity, allowing brands to try new ideas, learn from the results and continuously optimise their marketing efforts.
“By delving into more effective performance marketing strategies, brands and businesses can make data-driven decisions to optimise their results. It’s also important that marketers are keeping up to date with rapidly evolving digital trends. With social media platforms evolving into search engines and adaptive AI coming to the fore, marketers must devise innovative methods to attain Zero Party Data and establish tailored strategies for digital consumers” added Tina Ahmed, Senior Digital Engagement Manager APAC.
The current economic climate presents unique challenges for businesses. Having a well-defined marketing strategy and leveraging performance marketing can be instrumental in achieving success. A clear marketing strategy provides businesses with a roadmap to navigate through uncertainties, make informed decisions, and align marketing efforts with overall business goals. Performance marketing, with its data-driven approach and focus on measurable results, allows businesses to optimise their marketing spend, achieve cost-efficiency, and drive higher ROI. It also promotes personalisation, customer-centricity, innovation, and creativity in marketing strategies, which are essential in standing out from the competition and weathering the economic storm.