Why Marketing is Essential in Challenging Times

Historically, when times are tough, one of the first costs to be cut for businesses is marketing.

We’ve seen it time and time again. From pausing the progress of campaigns to telling partners or agencies to hold off on their efforts, unfortunately, marketing activity is usually the first to fall during a rough patch. However, this commonly-held belief can actually do more harm than good. Halting marketing efforts in a rough patch may mean eliminating the chances to bring in any new activity — right when you need it the most.

Established in 2008, (in the midst of one of the worst economic recessions since the 1920s), and recently celebrating our 15th year, we know a thing or two about the importance of continuing your marketing efforts through economic challenges.

So, read on to find out why investing in marketing activity should remain an essential business cost — even when the economy seems to have other ideas.

Why market in an economic downturn?

While spending more on digital marketing during a recession or rough patch might sound counterintuitive, it can be one of the most insightful decisions your business makes.

In fact, cutting marketing spend during a recession not only makes it harder to advertise your products and services, but has a detrimental effect on customer retention too.

“Companies that cut their marketing budgets due to recession not only make it harder to retain customers but also to bring back new and existing customers once economic growth returns.”

 

( International Business Barometer report from Sapio Research)

As such, some businesses have actually opted to increase their marketing spend during economic downturns. Elsewhere in the report from Business Barometer, data shows that some 37% of businesses plan to use the recession, and the promise of more captive audiences, as an opportunity and plan to increase their marketing spend overall.

What can history teach us?

In the past 100 years, there have been multiple periods of recession and financial crisis. However, this has allowed us to learn the best way to tackle these situations from a business perspective.

Marketers have studied the recession of 1920/21. The findings showed that companies that kept investing in marketing continued to grow their sales once the economy picked back up, whereas competitors that cut their budgets saw sales decline for the next 3 years (on average).

Similar research into the 2007/08 credit crunch found that businesses that reduced their marketing budgets did actually perform better throughout the duration of the crisis. However, once the economic crisis had passed, their revenue began to fall. Comparably, companies that had continued their marketing efforts throughout the crisis performed much better in the period following the recession.

This research strongly backs up how a short-term save on marketing costs can have a long-term, negative effect on your business. The charts below help visualise this:

So, history has clearly shown us that loosening your grip on marketing efforts during an economic downturn could be one of the worst things you do as a business owner. But let’s look at the other side of the same coin and explore the core benefits that come with maintaining consistent marketing spend when things get tough.

The business benefits of marketing during a recession

1. Build online presence

One of the core pillars of any successful marketing strategy is a business’s ability to cultivate a strong online presence. Irrespective of your industry, the extent to which your business is ‘seen’ online directly correlates to its perceived authority, trustworthiness, and expertise — all of which are ranking factors in Google’s famed ‘E-E-A-T’ acronym.

During tough times, consumers are going to be making cutbacks where they can — ruling out anything that they deem non-essential or a ‘nice to have’. So, keeping your brand front-of-mind, with enhanced online visibility, becomes critical.

And how do you increase online visibility? Through an effective digital marketing strategy.

2. Target only the most relevant of users

While it is logical to consider increased engagement a goal for marketing efforts, in an ideal world, you don’t just want higher numbers of random traffic rolling in. You want the users visiting your site to be relevant and interested in your products or services. This is where tailored digital marketing comes in.

With paid social ads or PPC, you can target the users who:

• Are the most relevant to your site
• Have visited your site before
• Are in the demographic most likely to do business with your company
• Have interests similar to your brand
• Have recently abandoned their cart halfway through a purchase

While it is tempting to want to bring in as much traffic as possible, with a limited budget, putting your brand in front of the select individuals most likely to complete a conversion – such as buy a product, sign up for a newsletter, etc – is much more viable and cost-effective.

If you could invite 100 strangers to your store but only 2 would buy, or invite 20 interested buyers with a 100% purchase rate, what would you opt for?

3. Build customer relationships

Another reason why investing in marketing is so important during economic downturns has much to do with consumer psychology. Let’s break things down a little.

By definition, marketing is ‘the activity or business of promoting and selling products or services’. That is, how you sell or ‘market’ something. Marketing involves targeting users, persuading them to buy your products or services, demonstrating how your brand can help solve their problems, and profiling the benefits of choosing your brands over others.

Without marketing, then, you’re essentially just trying to hard sell products without consideration for consumer pain points or what people are looking for.

In an economic downturn, a period where people are going to be the most reluctant to part with their hard-earned cash, marketing becomes essential. In order to convince consumers that your brand is worth their money.

And how can digital marketing do this? Through some pretty genius consumer psychology.

Consumer psychology & digital marketing

It’s been proven time and time again that connection with consumers breeds loyalty and growth of that bottom line.

In fact, according to a recent study from Sprout Social, 57% of customers will increase their spending when they feel connected to a brand. This connection can be nurtured in a multitude of ways, all of which form part of a holistic marketing strategy.

1. Creative content

Make sure that your website has a blog where relevant, relatable, useful creative content is shared regularly about your business, company culture, products and services. A blog is one of the best places for potential customers to ‘meet’ your brand.

2. Email marketing & newsletters

Sending personalised content right to potential customers’ inboxes is a surefire way to close that distance between your brand and them, ensuring you remain front of mind for your audience.

3. Organic social posts

Perhaps one of the most effective ways to make consumers feel close to your brand, being active across social media channels really brings your business to the ‘human’ level of the audience. Sharing relevant, perhaps even humorous, content on your social platforms — we’re thinking Lidl’s Twitter or Innocent’s TikTok here — allows your brand to become instantly more personable.

And that applies to the individuals within your business too! Fun fact: Did you know that 70% of consumers report feeling more connected to a brand if its CEO is active on social media? What’s more, 72% of consumers reported similar feelings when employees share information about a brand online.

Turn your people into advocates for your business, and you’ll see growth in results without any additional marketing expenditure. Win-win, right?

It pays to market your brand

So, putting that all together in the form of a holistic, multichannel creative marketing strategy sounds like a recipe for success to us. Spending the time to organically gain trust and build rapport with your audiences through marketing is just as — if not more —effective than investing hundreds into sales-heavy adverts.

Need help navigating marketing on a budget?

From PPC and paid social to content marketing and site migration, our team of expert Giants can help you navigate the digital marketing sphere — even when times get tough. Talk to us today to get started.