Marketing is one of the first casualties when a recession looms. While your competitors are slowing down, you should be speeding up. In 2008, several companies rethought their branding and positioning in order to adapt to the changing landscape. Netflix added 18 million subscribers, and Amazon nearly doubled its profits.
As the prospect of a looming recession continues to grow, many companies are looking to reduce costs. Meta, Twitter, Google, and more have all begun layoffs. And with those digital big box stores cutting back, smaller companies will follow suit.
So what gets cut next?
You guessed it, marketing budgets.
Marketing is one of the first casualties when a recession looms. However, this isn't always the best decision. According to the Harvard Business Review, it's essential to understand recession psychology. While your competitors are slowing down, you should be speeding up.
In fact, a report took a look at companies that continued marketing efforts through the 2008 recession, and the results are quite staggering. These businesses saw massive accelerated growth as consumer confidence recovered.
So is reducing marketing costs really the right move?
Why cutting back on marketing might be a bad idea
In 2008, several companies rethought their branding and positioning in order to adapt to the changing landscape. For one, as TV advertising stepped to the side.
Rather than cutting their TV ads budget, companies looked for more practical, untapped solutions that were also cheaper. And as we know, this trend continued onward, and the companies that got in early reaped massive benefits.
In 2020, the companies that experienced the most success doubled down on what propelled them forward in the first place. Netflix added 18 million subscribers, and Amazon nearly doubled its profits. Of course, this is because the pandemic forced everyone to stay inside. But there's a lesson: adapting to the environment and anticipating your customer's needs is essential to success.
As we prepare for uncertain economic times, you must identify what is most important to your customers and potential customers. Here are some potential questions to ask yourself if you want to anticipate accordingly:
Are your customer's problems painful enough to continue buying your product?
Are there ways to make your solution more effective, faster, or more appealing?
Are you staying consistent with SEO and other long-term marketing initiatives?
Have you considered newer, more effective customer acquisition methods like TikTok Ads and influencer marketing?
For an eCommerce company, it might be most beneficial to test out influencer marketing while you pull back on Facebook Ads. For others, it may be time to start investing in building out your website content and prioritizing SEO.
The point is, there are a ton of different ways you can market, it just depends on what makes the most sense and where your customers/users reside. But the main point here is simple. It's critical to adapt and anticipate.
However, that's not all.
Get - and listen to - customer feedback
As business owners, sometimes we get so busy and caught up in our daily activities that we forget our customers are humans too. They’re also busy, have concerns, and want to solve their problems. Oftentimes the best way to improve your product (and anticipate what the market wants) is through customer feedback. Whether it's a survey, Reddit, Twitter, or even in-person interviews, getting customer feedback is essential. That way, you can assess how and where your product is used in their daily life. Is it essential, expendable, or somewhere in the middle?
Then, use this new information to address the highest leverage points in your marketing funnel. In other words, optimize your landing pages to address new pain points or highlight a different part of your product's solution in your content marketing.
SaaS products are exceptionally well-positioned to do this during a recession. This is because most solutions are already solving a problem, increasing efficiency, or optimizing an existing process. Sometimes all it takes is a change in wording and you’re suddenly connecting better with your audience. The key point? Speak the same language as your ideal customer/user.
Trust, simplicity, and effectiveness lead the way
In past recessions, these three concepts are what companies embodied to ensure long-term success. For instance, Starbucks was on the brink of collapse in 2008. It went corporate and became more like a gift shop than a place to grab a coffee — resulting in its brand image suffering.
In fact, Starbucks rolled out something called "My Starbucks Idea." It was a way for customers to share their thoughts on the environment, food quality, and more.
It worked.
More than 93,000 ideas across social media. The program rebranded the company, brought tons of positive media attention, and set the brand up for long-term success. Starbucks applied the principle of trust and accountability by bringing customers' opinions to the surface. Additionally, this was a simple solution. Your customers know what they want, so why not ask them? Plus, it turned out to be highly effective, which in the end, is all that matters.
Whether or not your company is the next Starbucks is beside the point. During a company-wide flatline, it's essential to focus on trust, simplicity, and effectiveness in the overall marketing efforts. Applying these principles allows you to reposition your brand in the eyes of consumers and reap the benefits like improved customer loyalty and satisfaction.
Stay consistent
If you've read Robert Cialdini's book Influence, then you know consistency is one of the principles of persuasion. And it's true. shows a consumer needs to see an ad roughly seven to eight times before purchasing. Consistent messaging can address problems like price, quality, and reliability - and that's where marketing comes in.
By staying consistent with your SaaS marketing strategy, you'll increase your brand awareness while converting those on the edge of your marketing funnel, ready to purchase. And when it comes to things like SEO, it's vital to stay consistent as Google (and other search engines) reward websites with high consistency.
So while spending money in an economic downturn is undoubtedly intimidating, sometimes taking a little risk can return great results. And guess what, your competition probably isn’t doing the same thing. That means more face time and more opportunities to reach your potential clients. So stick with it, and best of luck!
