![\"\"](\"https:\/\/kexino.com\/wp-content\/uploads\/2022\/11\/marketing-during-a-recession-1200x1200.jpg\")
<\/div>\nBy all accounts we\u2019re standing by a cliff-edge, about to head into a global economic recession. It\u2019s no surprise that businesses are looking for ways to mitigate the impending damage.<\/p>\n
For most, that manifests as a choice between either reducing costs, or increasing efficiencies. And this is where most small business owners get it wrong.<\/p>\n
In times of trouble, for many businesses marketing is the first thing to get cut \u2013 as well as the last thing to return.<\/p>\n
But why would an erstwhile savvy business person do such a thing? To sever a mechanism so essential to the value creation process, driving awareness and creating sales opportunities?<\/p>\n
I think there are two main reasons:<\/p>\n
- \n
- Many business owners still see marketing as a cost to their company<\/a>. They see it as optional, inefficient, unattributable, and \u2018unscientific\u2019 compared to the cause-and-effect, rational operating nature of other business units. Perhaps they\u2019ve grown their business without any formal marketing efforts, confirming their belief that marketing isn\u2019t really needed.<\/li>\n
- The people hired as marketers aren\u2019t able to perform the duties expected of the position<\/a>. This is usually because they\u2019re inexperienced or uneducated in what marketing actually is. Whatever the reason, their inability in moving the revenue needle means they\u2019re considered dispensable. So they get moved sideways \u2013 or get canned.<\/li>\n<\/ol>\n
Why businesses employ marketing inexperience<\/span><\/h2>\n
Of course, reason #2 is closely connected with reason #1. Its epidemic-implemented presence has a number of reasons.<\/p>\n
From an HR perspective, taking on someone with little or no marketing experience is seen as an inexpensive hire with minimal risk. So if (when?) they fail at the job you\u2019ve asked them to do, you convince yourself that you haven\u2019t lost much.<\/p>\n
Secondly, since they\u2019re looking for your guidance and direction, you get to control the strategy and narrative. You get to direct their focus, tactical implementation and output.<\/p>\n
But since you don\u2019t have any marketing training or experience either<\/a>, in reality it\u2019s the blind leading the blind. The chance of success, however you want to measure it, is more likely to be based on luck than skill.<\/p>\n
You\u2019re wasting time and money trying things based on waving a wet finger in the air. You haven\u2019t done the basics that should underpin any marketing effort. All the while competitors are growing market share, stealing customers from under your nose.<\/p>\n
The problem with hiring an amateur to do the job of a pro<\/a> is inexperience doesn\u2019t know what it doesn\u2019t know. People ignorant of the subject think marketing is about posting on social media, or making TikTok videos<\/a>. Moreover, (most likely) your only experience with a marketer has been someone who designs a flyer or organizes events. Which means you\u2019ve no clue what a marketer actually does either.<\/p>\n
It\u2019s almost as though marketing has a marketing problem.<\/p>\n
Beating the recession with ESOV<\/span><\/h2>\n
It\u2019s important to differentiate business costs between what\u2019s essential and what\u2019s optional. It\u2019s tempting to reduce marketing expenditure when cashflow is unpredictable. However, making smart decisions now can catapult revenue when things get less crazy.<\/p>\n
Marketing geeks and academics talk about something called \u201cExcess Share Of Voice<\/a>\u201c, or ESOV. The principle of ESOV is that, during an economic downturn, the effective reach of your marketing is increased.<\/p>\n
To understand ESOV we first need to understand SOV \u2013 Share Of Voice.<\/p>\n
SOV is how well your brand is noticed, compared to everyone else in your market category. It\u2019s a measure of how well your marketing messaging (ads, website\/e-commerce traffic, mentions, whatever) compares to the competition.<\/p>\n
Want a crude, simplistic example? OK, since you asked so nicely\u2026<\/p>\n
Supposing you make widgets. Imagine that people on social media talk about wanting to buy widgets 100 times in any particular week.<\/p>\n
As well as you, they talk about a number of your competitors. If your brand is mentioned 25 times out of those 100, you have a SOV of 25%. Not exactly rocket science, right?<\/p>\n
There\u2019s plenty of empirical evidence to support the notion that an organization\u2019s Share Of Voice is linked to their Share Of Market<\/a>. In the above example, a brand with 25% SOV usually has a similar share of that market category.<\/p>\n
With me so far? Great.<\/p>\n
ESOV comes into play when a brand\u2019s Share Of Voice is higher than their Share Of Market. In other words, they\u2019re doing better than they should be doing.<\/p>\n
While closely related, ESOV and SOV are different. SOV compares all brands to all competitors, while ESOV compares all brands to one competitor.<\/p>\n
Using our example again, suppose (because the other guys aren\u2019t as active) you were name-checked 30 times in those 100 mentions. You\u2019re fighting out of your weight class, right? People are noticing you more than the competition, because your rivals aren\u2019t marketing as much as they were.<\/p>\n
So why\u2019s this important?<\/p>\n
What\u2019s interesting about ESOV is what happens when the selling environment reverts to its previous state.<\/p>\n
As the competition puts their marketing activities back in place, you retain the boost you had during the dark times. Your SOV stays higher, which means people are thinking about you more than the competition when looking to buy widgets. All of this translates to increased market share. Boom. Ka-ching.<\/p>\n
![\"graph](\"https:\/\/kexino.com\/wp-content\/uploads\/2022\/11\/impact-of-cutting-marketing-spend-on-product-pricing.jpg\")
<\/p>\nThe effects of cutting marketing spend on product pricing
(\u00a9 ebiquity.com)<\/p>\n<\/div>\nHow much growth? Well, Nielson reckons a 10-point gap advantage between Share of Voice and Share Of Market translates into 0.5% of market growth. An IPA study<\/a> (from 2008, admittedly) puts it at 1%.<\/p>\n
Marketing in a recession<\/span><\/h2>\n
All of this gets exponentially more serious when in a recession. Cutting campaign spending during economically lean times not only sends the wrong signal to your market. It reduces brand awareness, visibility, reach, and engagement.<\/p>\n
Not only does that impact sales in the short term. It increases the costs of new customer acquisition, increases pricing sensitivity, and reduces customer loyalty.<\/p>\n
So what\u2019s the right play when your marketing efforts (and budget) are being scrutinized even more than normal?<\/p>\n
1. Brand Building vs. Sales Activation<\/span><\/h2>\n
We can break down the types of marketing messaging into two distinct camps: Brand Building, and Sales Activation.<\/p>\n
Brand Building<\/a>, as the name suggests, is about increasing your visibility and top-of-mind recollection in the minds of the customer. In many categories \u2013 especially in B2B \u2013 the people who see your marketing are not ready to buy at the time they see it. They\u2019re what we call out of market<\/a>.<\/p>\n
Sales Activation marketing, on the other hand, is about converting prospects into customers. Sometimes called Direct Response or Performance Marketing, it\u2019s designed to get people to buy what you\u2019re selling right now. It\u2019s the attention driven \u201cbuy this product today\u201d, \u201climited offer\u2019, \u201cbuy one, get one free\u201d type of stuff.<\/p>\n
While many small businesses ignore it, brand building is an essential component to any successful marketing plan. Why? Because \u2013 as I\u2019ve mentioned above \u2013 most people who see your messaging aren\u2019t ready to buy right now.<\/p>\n
Brand Building work is a future investment to keep you top-of-mind when prospects are in a position to buy what you\u2019re selling. It\u2019s like a mental bookmark they refer to, when they\u2019re shortlisting which suppliers are worth considering.<\/p>\n
Brand Building is essential, because if you\u2019re not on that shortlist you may as well not exist. There\u2019s little point blasting prospects with offers on your product when they don\u2019t know you, or trust you.<\/p>\n
Combining Brand Building and Sales Activation during a recession turbocharges the effectiveness of your marketing. Not only do you mop-up more ready-to-buy sales due to your increased Share Of Voice. Your also in the buyer\u2019s consideration space when the green shoots of economic growth start to show themselves.<\/p>\n
You\u2019re better placed than competitors to take advantage of the mini-boom that follows a recession, as buyers open their wallets again.<\/p>\n
![\"brands](\"https:\/\/kexino.com\/wp-content\/uploads\/2022\/11\/share-of-voice-defined-as-a-brands-share-of-total-category-communications-expenditure.jpg\")
<\/p>\nSpend now, benefit tomorrow
(\u00a9 IPA\/Kantar)<\/p>\n<\/div>\nIn short, if possible maintain (or even increase) your marketing budget during a recession. Doing so positions your organization to accelerate past competitors intent on tightening their belts.<\/p>\n
2. Media and Channel<\/span><\/h2>\n
Forced to make every marketing dollar work harder in a tough economy, a recession is a great time to review planning and execution methodology.<\/p>\n
Too many businesses ride the \u2018cruise control\u2019 wave of doing the same old stuff, year after year<\/a>. Sure, they may get a modest return on their marketing spend. But they don\u2019t take time to peer above the parapet to see whether buyer expectations have evolved<\/a>.<\/p>\n
Conduct research to help validate \u2013 or dispute \u2013 your current marketing strategy. Speak to your customers to find out their content consumption habits. Listen to their concerns, to get insight and ideas on new messaging or advertising campaigns.<\/p>\n
Maybe it\u2019s an opportune moment to try something new, and different. Could you run a webinar, start a podcast, or launch a YouTube channel? Could your LinkedIn content benefit from using updated messaging, graphics, or video?<\/p>\n
Perhaps it\u2019s the perfect time to invest in training for your team to learn new techniques, software, or applications.<\/p>\n
Most businesses haven\u2019t reviewed their content strategy, publishing plan, or choice of media in the last, say, three years. There\u2019s a very good chance the effectiveness of your marketing output can be increased.<\/p>\n
Customer buying expectations continue to change<\/a>, therefore so should you plan on delivering information, advice, opinion, entertainment, whatever.<\/p>\n
Arguably the biggest media format growth in recent years has been the implementation of video into your marketing communications<\/a>. Mainstream consumer-centric networks such as Facebook<\/a>, Instagram<\/a>, TikTok<\/a>, and YouTube<\/a> have influenced more business-centric platforms such as LinkedIn. The result is an increased acceptance of video content in buyers\u2019 social media timelines.<\/p>\n
Marketing opportunities during a recession<\/span><\/h2>\n
Perhaps the biggest marketing opportunity any business has in financial times of uncertainty is the one staring you in the face: your current customers.<\/p>\n
It\u2019s exponentially easier to sell to existing customers than to new ones<\/a>. Yet many companies take their eye off the ball and focus too heavily on prospecting for new business. Depending on your business, industry, and customer base, that may not be the best plan of action during a recession. Longer sales cycles and pricing pressures can erode profit margins \u2013 hitting cashflow hard.<\/p>\n
Increasing communications efforts to your current customer base can drive repeat purchases, upgrades, or incremental product additions. If you\u2019re worried about coming out of a depressed economy unscathed, you can bet your customers are feeling the same way.<\/p>\n
Offering special promotions or services to existing clients doesn\u2019t just show them you have their back. It helps build affinity and loyalty.<\/p>\n
History doesn\u2019t just show us that recessions are getting shorter in duration. It also provides evidence that, when the sun comes out again, buyers come back stronger than ever. Data from the two most recent economic catastrophes \u2013 the 2008 recession and the COVID-19 pandemic<\/a> \u2013 confirm this.<\/p>\n
Yes, we\u2019re heading into murky waters. There are sure to be casualties. But it\u2019s also true that this, like everything else, will eventually pass. As marketers, our job is to come up with innovative and creative solutions to solving business problems.<\/p>\n
If a recession doesn\u2019t qualify as a business problem, I don\u2019t know what does.<\/p>\n
FAQs<\/span><\/h2>\n
How do businesses measure the effectiveness of their marketing tactics during a recession?<\/strong><\/p>\n
One of the most popular ways is a combination of quantitative and qualitative metrics including sales data, filtered website traffic, engagement rates, and customer feedback.<\/p>\n
Any examples of businesses that successfully navigated a recession through strategic marketing efforts?<\/strong>
Success stories of companies thriving in recessions often highlight flexibility in strategy, increased focus on customer value, and innovative use of digital marketing.<\/p>\nDuring the 2008 financial crisis, for example, companies like Amazon and Netflix focused on customer experience and innovation, leading to significant growth.<\/p>\n
What specific marketing channels are most effective during a recession, and how does this vary by industry?<\/strong>
This depends on a multitude of factors such as the kind of business, customer behavior and expectations, and the nature of the product.Having said that, many marketers would agree that buyer-appropriate digital channels can offer cost-effective, measurable ways to engage with target audiences.<\/p>\nHowever that doesn\u2019t mean that the more \u2018traditional\u2019 channels (such as direct mail) don\u2019t have a place. Industries with a strong online presence may benefit more from SEO, content marketing, and social media, while those with physical products might find value in combining online efforts with direct email marketing or partnership promotions to maintain customer interest and loyalty.<\/p>\n
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\n - The people hired as marketers aren\u2019t able to perform the duties expected of the position<\/a>. This is usually because they\u2019re inexperienced or uneducated in what marketing actually is. Whatever the reason, their inability in moving the revenue needle means they\u2019re considered dispensable. So they get moved sideways \u2013 or get canned.<\/li>\n<\/ol>\n
![\"Kexino](\"https:\/\/kexino.com\/wp-content\/uploads\/2023\/03\/KEXINO-top-digital-marketing-agencies-DesignRush.png\")
<\/a><\/div>\n