Famed management consultant, Peter Drucker once said, “the best way to predict the future is to create it.” You can think of his comment in the way a stock-market investor might think of a growth stock. One way to predict future stock performance is to look for a company with strong fundamentals or, in other words, a company that’s already created a sound business model and executed on it. You’re not predicting the future so much as you’re tapping into a trend that’s already happening but perhaps still relatively unrecognized by the masses.
Unfortunately, one thing that may already be here is a recession, at least according to the textbook definition of two subsequent quarters of negative GDP growth. Though that definition — and by default the idea that we are actually in a recession — has recently become contentious. And while the poor economic tailwinds have not gone unnoticed, what they portend certainly still seems up for debate.
If you prefer different definitions of the word, or different indicators of economic contraction, you can paint a picture of an economy that has not yet fallen into the trough. Even if that’s the case, it is difficult to argue that we are not at a precipice.
Whether you think we are there or not is somewhat immaterial when it comes to what it means for your business. Starting yesterday and moving forward, brands will examine their balance sheets with a bit more scrutiny. As we are all too well aware, the first thing to catch bookkeepers’ eye is often the marketing budget. Marketing tends to bear the brunt of poor financial performance because it’s not always easy to measure its impact on the company’s success (or lack thereof).
Hosted a great event? Executed a killer brand campaign? Built a massive social media following? Love it. But can you look at your company’s balance sheet and point to the impact those initiatives made? Can you go through quarter-by-quarter numbers and identify inflection points driven by marketing activities?
If your answer to those questions is “no” it will be difficult to argue for continued budget. That’s unfortunate, given how critical marketing is to brand success. When companies shift away from marketing activities in a cost-cutting measure, they often tend to reduce budgets to end-of-funnel tactics. These tactics are enticing in leaner economic times because they promise more immediate returns on investment.
As this shift happens, brands will instinctively shy away from more awareness-driving efforts, instead focusing on getting users to a point of sale or conversion as quickly as possible. As their consultants and specialists, it’s our responsibility to talk clients off this ledge.
The simple response to this is that without a continued investment in awareness and creative activations, market share diminishes. If nothing goes in the top of the funnel, nothing will come out the bottom. When the top-of-funnel activities dry up, the business eventually feels the long-term impact of a smaller pool of potential customers.
The good news is that you, as a marketer, have tools at your disposal to that can help in a pinch. For starters, do what you can to not compromise on brand reach and the creativity that goes into brand-awareness activities. If you need to save some cash, consolidate tactics and channels to improve funnel efficiency. And no matter what tack you take, measure everything.
That’s what it all really comes down to. Can you measure your activities, whether under a reduced budget or with a full cash flow, and show how they impact the business’ bottom line? Can you demonstrate how many new customer conversations you had as a result of that awesome event or strategic campaign? Your immediate goal is to find an answer to these questions.
There might not be anything stopping recession predictions from coming true. If those predictions are flying, it means the downturn is already here. But there are things you can do to keep the marketing engine churning and the potential leads flowing down the funnel.
We hope that you weather whatever comes next and keep these thoughts in mind as you finalize those pesky 2023 strategies!
Let us know if we can help. We have experts who have been through the ringer with companies in all sorts of industries and stages of business building. Drop us a line today. With our combined brainpower, we’re certain we can help you write your own future.