The unprecedented economic impact of the COVID-19 pandemic has surpassed what most imagined possible. The International Monetary Fund has declared a global recession, nonessential businesses have closed as social isolation measures take effect, and the U.S. economy is heading toward a recession of its own.
As the pandemic takes its toll on both big and small businesses, the best marketers will take stock of their budgets and strategize about how to handle the challenges ahead.
Here are three principles for successful marketing in a recession:
Don't slash your budget. The temptation to cut spending during a recession is strong for marketers who only see short-term concerns. But history has proven the brands that continue to market and spend during recessions end up reaping the largest benefits when the economy rebounds.
During a recession in the early '90s, McDonald's decided to reduce its advertising and promotion budget. Meanwhile, Pizza Hut and Taco Bell seized the opportunity and saw increased sales — Pizza Hut by 61% and Taco Bell by 40%, according to Forbes. Meanwhile, McDonald's sales dropped by 28%.
Confirm your target audience's values and behavior. Your target audience's values may shift during a recession. Study past economic slumps to understand how your consumers' behaviors change in a recession, and adjust your strategy accordingly.
For example, the durability of goods becomes a more significant concern when people are working with tighter personal budgets or if buyers feel that the future is uncertain. Consumers are also more likely to buy less or forgo purchases altogether.
Note, too, that your best customers are the most expensive to replace. According to a report from Adobe Digital, repeat customers deliver the most revenue — even during slow shopping periods. The study revealed that 8% of website visitors contributed to 40% of revenue.
Consider your brand's unique value proposition (UVP) as well as why your audience does business with you instead of your competition. Your UVP is always important, but the tendency to cut costs during a recession makes it vital to show customers why your product or service is valuable enough to warrant the expense.
Analyze, track, and optimize everything. Marketing in a recession sometimes reveal changes in data, so you may need to refine your recession strategy to leverage the best-performing campaigns and efforts.
For example, TV is no longer the cheapest entertainment around. As a result, it's unlikely that investing in television ads will be as worthwhile at the moment.
Before the 2008 recession, brands were using events and experiential marketing as splashy, feel-good, attention-grabbing tactics. Today, marketers expect their live marketing efforts to impact bottom-line business goals.
The combined use of public relations, influencers, and social media has made it possible to stretch every dollar spent into millions of impressions and engagements — online and offline. Making every activation accountable to your company's overall goals is a necessity.
By learning how to market successfully during a recession, you're much more likely to survive it -- and even come out thriving.