Are you worried about the impact a potential recession may have on your company? Do you feel like growth could be out of reach in such times?
As a marketer, you may be worried about your company’s growth in the face of economic challenges.
It may seem like an impossibility when consumer behaviours are changing overnight and spending falls dramatically, but many companies have shown that it’s still possible to thrive during economic downturns, even in medical device.
But how do they do it? Let’s look at the companies who have shown it’s possible and then dive into what you can do to follow in their footsteps.
Companies that have managed to thrive during a recession
Understandably, the possibility of a recession can fill your company management, marketers and sales teams with dread.
To help you understand that economic hardships don’t mean that growth is impossible, we’ve pulled together a few examples of marketing campaigns that went well during recessions.
Amazon
During the 2008-2009 recession, Amazon increased its marketing spend by 27% compared to the previous year. The company used this investment to launch new products, expand into new markets, and strengthen its brand. This strategy paid off, as Amazon’s revenue increased by 28% in 2009, and the company continued to grow in the years that followed.
Hyundai
Not all of Amazon’s stock includes big investments though, and it’s possible that during a recession, buyers will choose to delay investing until they feel as though the economic climate is more stable, however, Hyundai have demonstrated that that doesn’t have to be the case.
During the 2008-2009 recession, Hyundai increased its marketing spend by 8% compared to the previous year. The company used this investment to launch a new advertising campaign that emphasised its value proposition and offered a job loss protection program for customers.
This strategy helped Hyundai increase sales and gain market share, even as many other automakers struggled during the recession.
Pizza Hut and Taco Bell
The 1990-1991 recession saw McDonalds eliminate its marketing budget to save money, whilst competitors Pizza Hut and Taco Bell took the opportunity to invest more heavily in promotion.
Pizza Hut innovated and created new menu items, whilst Taco Bell introduced their value menu. The result was that Pizza Hut’s sales increased by a huge 61%, whilst Taco Bell grew by 40%.
On the other hand, McDonald’s saw their sales fall by 28% post-recession, demonstrating the importance of consistent marketing during a downturn.
The Mayo Clinic
In 2008, the Mayo Clinic launched a marketing campaign called “Taking the Fear Out of Healthcare.”
This aimed to reassure patients that despite economic uncertainty, the Mayo Clinic was still committed to providing high-quality healthcare.
The campaign included ads in national publications and partnerships with healthcare organizations. The campaign was successful, with an increase in patient visits to the Mayo Clinic and positive feedback from patients, despite the downturn.
Do you need to cut marketing spending?
Historically, the first area of businesses to suffer during economic downturns is marketing.
According to a report by the Association of National Advertisers (ANA) and the Marketing Science Institute, marketing budgets declined by an average of 8% during the 2008-2009 recession. Additionally, a survey by the American Marketing Association found that 62% of marketers reduced their marketing budgets during the same period.
Cutting marketing spend can be a quick way to reduce costs as it isn’t necessary to keep the day-to-day business running, but it often harms businesses in the long run as growth becomes inconsistent, if not impossible without an active marketing strategy.
In addition, reducing marketing spend can also have a negative impact on brand awareness and customer loyalty. If consumers perceive your brand as being less visible or less committed during tough economic times, it could erode their trust, making it harder to regain their business once the economy improves.
You may be thinking “you’re a marketing agency, of course you’re going to say that.” But for some companies, cutting marketing spend is the right strategy to better adjust to the current economic climate.
For example, you could focus on targeted marketing campaigns that reach your most profitable customer segments or invest in digital marketing channels that offer a higher ROI than traditional advertising methods. This might be cheaper (and more profitable) than what you’re currently doing.
Ultimately, the decision to stop or continue marketing spend during a recession should be based on a careful analysis of your business’s specific circumstances and goals.
How to grow despite a recession?
Growing a business during a recession is undoubtedly a challenge, or is it?
Let’s go through how you can adjust your marketing campaigns to ensure that you come out unscathed and even in a better place.
1. Focus on customer retention
During a recession, it is more important than ever to keep your existing customers happy and engaged. This can be achieved through excellent customer service, loyalty programs, and personalised marketing campaigns.
2. Innovate
A recession can be an opportunity to innovate and come up with new products or services that meet the changing needs of your customers. This can help you stay ahead of the competition and attract new customers.
3. Cut costs
While it is important not to cut marketing spend entirely, it may be necessary to reduce costs in other areas of your business. Look for ways to streamline operations, negotiate better deals with suppliers, and cut unnecessary expenses.
4. Expand your market
Consider expanding your market by targeting new customer segments or geographic locations. This can help you diversify your customer base and reduce your dependence on any one market.
5. Emphasise value
During a recession, customers are looking for value. Emphasise the value that your products or services offer and consider offering discounts or promotions to attract price-conscious customers.
6. Invest in digital marketing
Many digital marketing activities (social media, email marketing, SEO, etc) can be more affordable than bigger marketing campaigns but still profitable. With more people spending time online, investing in digital marketing channels can be an effective way to reach new customers and promote your business.