A recessionary environment can be a make-or-break time for businesses. Some of today’s most successful companies were founded during recessions, such as Google during the dot-com bust of the early 2000s or Uber during the Great Recession of 2008. But for every company that thrives during a recession, there are many more that fail.
One of the key reasons that some companies succeed while others falter is how they handle their marketing and advertising spend during these difficult times. When a recession hits, businesses are quick to cut marketing budgets as they seek to reduce costs. But this can be a mistake.
Recessions provide opportunities for businesses to reach customers who may be more price-sensitive and receptive to new offers. Instead of cutting marketing spend, businesses should focus on reallocating their ad budgets to more efficient channels and developing interactive content that will capture the attention of customers who may be spending more time at home. Here are three ways businesses can reach and engage customers despite a market slowdown:
1. Develop interactive content
Customers are spending more time than ever online, so it’s important to develop content that is interactive and engaging. In a recession, ROI becomes even more important, so businesses should focus on creating content that will drive leads and sales.
Traditional paid advertising can be expensive and is subject to banner blindness, which is when users tune out online ads. Interactive content, such as quizzes, polls and surveys, can be a more effective and cost-efficient way to reach and engage customers.
Instead of non-consensually slapping users in the face with a commercial message, interactive content allows businesses to provide valuable information or entertainment while also gathering data that can be used to improve marketing campaigns.
For example, a fashion company might run a style quiz that helps users find the right clothing for their body type. Not only is this quiz interactive and fun, but it also provides the company with valuable data about its customers’ preferences.
2. Target recession-proof industries
A recession doesn’t impact all sectors equally. In fact, some industries have seen tremendous growth. The energy industry, for instance, has seen a resurgence as renewed consumer demand and limited oil supply have led to higher prices. Year-to-date, as the S&P500 has fallen by around 15%, the United States Oil ETF is up over 30%.
Healthcare is another industry that is relatively resilient to economic downturns. As people age, they require more medical care, and government spending on healthcare tends to increase during periods of economic hardship.
Other so-called “defensive” industries, such as food and beverage, household staples and personal care, also tend to do well during recessions.
Businesses that target these recession-proof industries can still find success even when the economy is struggling. That isn’t to say that your business needs to be in one of these industries to survive a recession, but it may be worth researching how your product or service can be positioned to appeal to these industries.
3. Focus on ROI-positive marketing channels
When businesses are cutting costs, they often reduce their marketing spend across the board. But not all marketing channels are created equal. Some, such as paid search and social media advertising, can be very effective in driving leads and sales but can also be expensive.
Other marketing channels, such as email marketing and content marketing, can be less expensive and just as effective in reaching and engaging customers. In a recession, businesses should focus on allocating their marketing budgets to the channels that will provide the most ROI.
Email marketing, for example, can be very effective in reaching potential customers who may be interested in your product or service but may not be actively searching for it. And because email is a permission-based channel, you’re more likely to reach people who are receptive to your message.
Content marketing can also be an effective way to reach and engage customers. By creating high-quality, informative content, businesses can attract customers who are looking for answers to their questions or solutions to their problems.
In a recessionary environment, it’s more important than ever to focus on ROI-positive marketing channels. By allocating your marketing budget wisely, you can still reach and engage customers despite a slowdown in the economy.
With the right approach, a recession can be an opportunity for businesses to thrive. By focusing on interactive content, targeting recession-proof industries and allocating your marketing budget to ROI-positive channels, you can weather the economic storm and come out ahead.