There is no denying that times are tough, and as consumers feel the pinch and are more cautious with how they spend their money, this has a trickle-down effect on businesses – as a dip in consumer spending means fewer sales for the company.
To compensate for a lower turnover, businesses naturally look for ways to cut down on expenses. Often as a knee-jerk, almost panic-driven reaction, one of the first budgets to be cut is the marketing budget since it is seen as non-essential, especially in comparison to expenses like rent, salaries, and utilities. However, spending money on marketing during a recession could be vital as it may save the business from folding completely.
Importance of marketing during a recession
When money is tight, it is imperative to have a strong brand presence and work toward winning over customers. Since customers are cutting back on spending, companies need to be more aggressive in attracting business. If you are toying with the idea of cutting your marketing budget, here is why you should not do it
Your brand awareness is likely to decrease
Cutting your budget might harm your business long-term, even when the economy improves and consumers spend more. When you stop advertising, your brand presence drops, which causes brand awareness to decline. It also harms your search ranking and brand loyalty. Unfortunately, if you are not in your target market’s face regularly, it is easy for them to forget your brand.
This gives your competitors an excellent opportunity to fill in the gap that you’ve left. Suppose your competitors improve their brand presence and build brand loyalty while you fade into the background. In that case, consumers will likely spend their money with your competitors rather than with you since the competitor brands are top-of-mind.
Communicates instability
When your brand disappears from the public view, it tells customers that the business is unstable. Consumers assume that an unstable company may not be able to provide good quality products and services, so even loyal customers may be tempted to look for other brands.
To keep up appearances and show consumers that the business is still going strong and can deliver top-quality products and services, it’s crucial to invest in brand visibility.
The business needs to change up its marketing strategy to be in line with consumer needs
As spending habits and consumer demands change, so should your marketing strategy. A marketing strategy that is implemented and successful during a time of economic prosperity is unlikely to work during a recession when people have less disposable income.
During a recession, people are less likely to spend money on non-essentials and luxury items, especially those in the lower to mid-income brackets. For this reason, you must evaluate your marketing budget and take into account how your target audience spends their money and then tweak your marketing strategy to suit these spending patterns.
Spending on marketing during a recession is also an excellent strategy to get ahead of your competitors, who are probably cutting their marketing costs. In this way, your brand will get more visibility since there will probably be less noise from competitors.
Marketing on a tight budget
As important as marketing is, it is unlikely that you will have access to a massive budget during a recession and when sales are slow. Still, it is possible to put together an effective marketing strategy on a tight budget. If you are working on a limited marketing budget, consider the following.
Network and collaborate with other brands
An easy and inexpensive way to market your brand and remain visible is to network and collaborate with other brands in your industry. Networking helps you build relationships, and people are likely to want to do business with people they know.
Collaborating with other brands allows you to showcase your brand to other companies’ consumers. When looking for brands to collaborate with, look for complimentary brands whose consumers will likely want what you sell. For example, if you are in the baby industry and sell baby clothes, a good company to collaborate with would be a company that sells baby diapers.
Make the most of social media
Social media is a cost-effective and easy way to reach your customers. The trick is to post consistently and respond to consumer comments and messages. When posting on social media, it’s important to have a strategy. Your content must be relevant and valuable to your audience so that they engage with it instead of scrolling past. Many companies make the mistake of only posting their products and services, which comes across as pushy.
While social media is an excellent platform to showcase what you offer, you should also post other types of content that will resonate with your audience. The content that people enjoy will vary by industry and target market, but you could consider posting tips and tricks related to your industry, motivational quotes, or funny stories and facts.
Consider a loan
In some cases, it may be helpful to take a loan to invest in marketing since top-notch marketing will yield rewards in the long run. Before taking a loan, it is crucial to have a clear plan of where you will spend the money.
If you have been in business for a few years and the company is financially sound, you will likely qualify for a business loan from a bank. Smaller businesses that are fairly new may not qualify for a business loan yet, but there are other avenues that you can pursue.
For example, you can take a personal loan to use in your business, even if you have a poor credit rating. Several creditors for bad credit may be able to assist you with a loan to meet your business needs, so spend time researching the options and pay attention to the terms to find one that suits you.
Conclusion
As a business, it can be challenging to manage your budget during a recession when sales are slow, but it is vital to maintain your marketing efforts as this will benefit the company in the long run. Instead of cutting your marketing budget, it is a good idea to tweak it to meet the current customer demands and remain visible.
