In Q1 and Q2 of 2020, the UK economy and many other European countries went into recession thanks mostly due to the spread of Coronavirus.
While this is obviously very bad news, thankfully there are some lessons from the 2008 recession that we can apply to help our businesses survive (or even thrive depending on industry) this time around.
In this article, I’m going to share with you our advice on how to best adapt your marketing to the downturn.
Where We Are Now
Consumer Spending (source: tradingeconomics.com)
Consumer Confidence (source: tradingeconomics.com)
As you can see from these charts, both consumer spending and confidence are down (to an even greater degree in the case of spending ). These put into perspective our current situation – people are spending money, but not to the same extent as last year for example.
So, where do we begin?
1. Consider How Your Target Audience Will React
There are a number of factors that go into a sale outside of marketing including consumer confidence and disposable income as well as lifestyle and values.
The best marketing is done when all of these factors are accounted for – in layman’s terms, understanding your audience. In a recession, this is more important than ever.
According to a review of the 2008 recession by Harvard Business Review, consumers in a recession can be divided into 4 categories:
- Slam-on-the-breaks – reduces all types of spending by eliminating, postponing, decreasing, or substituting purchases.
- Pained-but-patient – resilient and optimistic about the long term but not confident about the prospects for recovery in the near term or their ability to maintain business.
- Comfortable well-off – consume at near-prerecession levels, though now they tend to be a little more selective about their purchases.
- Live-for-today – respond to the recession mainly by extending their timetables for making major purchases.
If you’re not sure where to find this information, try the following:
- For B2C: join Facebook groups your target audience uses and take note of the conversations they are having;
- For B2B: do the same with LinkedIn;
- Have a strategy session with your salespeople and look for trends in the conversations they are having;
- Run a survey for your current customers in exchange for the chance to win something (Amazon gift cards tend to work well);
- Run the same survey but to your non-customer target audience via Facebook ads instead;
- Put a poll out on your social media profiles (e.g. Instagram stories, Twitter polls, etc);
- Run a poll on your website.
These should help build a picture of where your target audience sits within these 4 categories.
2. Tailor Your Efforts
In a recession, it’s more important than ever to focus on ROI. Revising your efforts over the past few months and honing in on the highest-converting channels with the best return will be worth the time investment.
Use analytics tools such as Google Analytics to find your best converting campaigns. It’s likely that paid advertising will be cheaper during a recession as many businesses try to cut back on costs (leaving an opportunity for you).
This chart is the counterpart to the Consumer Segments’ Changing Behaviour table above – depending on your offering and target audience persona, take on board these recommendations and try a new offering.
A couple of other tips we can recommend:
- Market to your existing customers – It’s cheaper to resell to a current customer than to convert a new one, leading to a high customer lifetime value (CLV);
- Focus on content – People have a lot on their minds in a recession, it’s likely that your brand isn’t at the top of their mind. Try hard-selling less and focusing more entertaining/inspiring/educating your followers and email subscribers, showing that you really do care about them even during tough times.
“Be fearful when others are greedy, and greedy when others are fearful.”
People’s emotions are high in times of a recession.
Your competitors are likely fearful and are pulling back on marketing (leaving an open opportunity for you), and your customers are likely worried about job security, paying the next mortgage payment, food availability, etc.
Use a recession as an opportunity to grab some cheap paid advertising for those looking for your product, and make your other customers feel good with genuine, human content.
Show that you can put aside your sales mind for a minute to show that you’re on the same side, even if it’s just an email. Your customers will love you for it.