10 ways marketing can help SMEs thrive in a recession
In an economic downturn, the marketing budget is minimized first, despite history showing time and time again that it is not a good idea to cut back. Our top ten reasons will show the necessity of small business marketing to thrive in a recession.
Marketing history replay
If you are in the process of creating a list of trade-offs for your business, the marketing budget should not be minimized as successful marketing is a consistent process, best started before a recession. History has proven that companies investing in marketing receive an accelerated growth payoff. In the 1981-82 and 1974-75 recessions, companies who continued investing in advertising enjoyed more growth than competitors who minimized or eliminated their budget. With the 2008 recession, there was a 13% drop in advertising, yet organizations that sustained their marketing efforts had 3,5x times more brand visibility.
Outsourcing - a 'can' and a 'should'
Recent years have brought more complex marketing with a customized approach across multi-media platforms. With marketing strategies adapting and becoming more diverse, winning new clients has become more challenging, especially for small businesses. The Great Resignation phenomenon, combined with the pandemic and the current financial downturn, has led to firms having difficulty sourcing and retaining professional skilled in-house workers. The solution is marketing outsourcing, where marketing activities can be outsourced to expert marketing agencies and teams.
Use mobile marketing to find new clients
Google estimates that 60% of purchasing decisions are made from smartphones, and 80% of web traffic is conducted using mobile devices, making a mobile-optimized website essential. Small businesses often forget clients make the majority of their purchases online and neglect to update their website or focus on mobile marketing.
The top Mobile marketing strategies to focus on during a recession are location-based marketing, SMS marketing, in-APP marketing, social media marketing, and proximity marketing.
Focus on recession-free industries
When a recession hits, not every market or industry is equally affected; some even remain recession-free. As your business goes through seasons of economic slump where there is little growth or loss, look towards the economically unimpacted industries, such as healthcare and the government industries.
Clients go for green
Competition is fierce in the industry, and companies need something to be distinguishable. Going green is a relatively inexpensive way to stand out during the recession and simultaneously make an ecological difference. While little can be done about economics in a recession, much can be done to save the planet.
Enduring brands are growing their reputations by taking the lead on sustainability and getting green certified. Leading, alongside eco-influencers and content creators, by being the change companies want to see, examples are set for staff, clients, and society to follow.
Client care is business care
When a recession begins, everyone is impacted, and a company's current clients and their continued support are worth gold. Client retention is the key to a company’s success, and focusing efforts on top service to existing clients offers 5-25 times more yield than acquiring new clients. With regular marketing and communication, existing clients experience your company’s genuine interest and care, strengthening their connection and trust in your ability to meet their needs. Your company is simultaneously seen as stable, secure, and a trustworthy ally in turbulent financial times that fosters confidence for new referrals.
Rethink your client offerings
As clients purchase more thoughtfully, weighing what they buy for what they pay during a recession more carefully, service bundle offerings and price models will have more consumer attention. Sales promotion techniques, such as discounts, BOGOs, coupons, and interest-free credit extensions, should be considered to draw the customers’ attention and boost sales.
Small businesses can also use a ‘fighter product or brand’ approach, bringing a cheaper version of the top-of-the-range product or service sold as another brand, to marketing.
Refresh your marketing strategies with change
A recession continues to influence the purchasing patterns of clients long after the crisis is passed. Companies often assume that clients will resume their pre-recession purchasing habits or behavior, but this isn’t often the case. Companies wanting an advantage over competitors should keep monitoring current and future trends, take a fresh look at their marketing research, and adapt market plans and strategies accordingly.
Finding your niche
An alternative to reducing the budget in a recession is to focus more on the right clients instead of all the clients. Adopting a more targeted approach can forge stronger client connections, increased loyalty, lead to more referrals, and drive sales. To be successful, companies need to customize their marketing according to their client's preferences. Small businesses should focus on niche marketing, spending time identifying their audiences, and knowing which products they need and when they need them -- and then focusing their marketing efforts just on them.
More for less marketing budgets
As recessions ask more from businesses to succeed, financially constrained, competitors may take their eye off marketing by delaying projects and stopping certain marketing activities, such as new product launches. Their disadvantages can make your business more visible, with less marketing outlay than usual. A good example comes from advertising. The reduced demand for advertising (in the last recession, companies reported a 13% drop in advertising expenditure) brings down the costs, and marketers can buy more advertising with less money.