According to economists, the U.S. is headed for a long and severe recession in 2023. Startups as well as established main street business owners are already feeling the initial shockwaves, with inflation reaching a record high of 9.1% in June 2022 (the highest rate of inflation to rock the nation since 1981).
We all know what inflation means: less spending by consumers. It’s one of the economic trends that leads to a recession, which is what all business owners should be gearing up for if they haven’t started already.
Traditional logic dictates that to survive an economic downturn, business owners should pull back on spending and redirect funds away from aspects of their business that they consider superfluous, such as marketing.
There are a couple of reasons why spending less time and money on marketing may seem like the wisest way to prepare for recession.
1. During the economic downturn that both precedes and makes up a recession, consumers are not spending as much money on goods and services. This means that no matter how good your marketing is, people aren’t going to buy from you. Therefore, reinvesting your business’s dwindling profits back into marketing may seem like a pointless affair.
2. With consumers buying less, you may not get as much return on investment from your marketing campaign. This will result in you losing money, which is not something you want to make a habit of during a recession.
There’s a problem with this line of thinking, though: It only accounts for short-term effects. If you derail your marketing now, you could lose out on several long-term benefits. Furthermore, when the economy takes a turn for the better, you want your brand positioned at the top of the market, not competing against other struggling businesses or up-and-coming startups for visibility.
With that in mind, we say, don’t cut back on marketing. Your best business tool amid a recession is staying visible.
The benefits of marketing and staying visible during an economic downturn
To stay afloat in an uncertain economy, you must stay visible. Here are five benefits to this marketing strategy.
1. Maintain brand awareness
The most obvious benefit of ensuring your business stays visible through marketing during a recession is that consumers will stay aware of your brand. Even if they can’t purchase from you right now, they will know you exist and may come back to you when the economy turns back around, and they have more money to spend.
2. Keep up with your competitors (or surpass them)
You’re not the only startup or established business who’s eyeing the uncertain economy with trepidation. Your competitors are, too, and you can bet that they’re developing their own strategies for staying afloat — and staying visible.
There’s no way for you to predict with certainty how your competitors will prepare for recession. They may decide to ramp up their marketing efforts or scale them back, depending on whose advice they’re taking, or which route they believe is the most lucrative.
Either way, the important thing is not what they may or may not do, but what you can do right now. By not letting up on your own marketing campaigns, you’ll be able to keep up with your competitors. You may even be able to surpass them, so that when all is said and done, your business is the one sitting on top in your industry.
3. Maintain brand loyalty among existing customers
With all this talk of a recession and cutting back on marketing, you may have forgotten about your existing customers. This is an oversight because marketing to loyal customers is just as important as marketing to new customers.
By keeping your business visible on social media accounts, on your website, and in their inbox through email campaigns, you’ll remind your loyal patrons that you still exist, that you still promote the values, products, and services they love, and that you’re not going anywhere anytime soon. In doing so, you’ll keep them loyal to your brand, thus guaranteeing a steady stream of revenue for your business in the coming rough months. Your marketing will, quite literally, pay off in the end.
4. Keep your digital marketing momentum going
Digital marketing is an aspect of marketing that, once you stop it, it’s hard to recover the momentum you had going.
For example, once you stop posting regularly on social media platforms like Facebook and Instagram, those algorithms will stop prioritizing your content. That means that if you take a break from posting on your accounts during the recession, and then try to regain your previous levels of engagement after the economy gets better, you may find it extremely difficult. More than likely, you will even lose money for a while.
Search engine optimization, or SEO, is another form of digital marketing that can produce a profitable ROI (the average ROI of SEO is $2.75 per $1 spent). But the only way it pays off in the long run is if you keep up with it.
Recession or no recession, there is no good or profitable time to pivot away from digital marketing.
5. Reap more profits at the end of the economic downturn
The greatest benefit of staying visible during a recession is that by the end of the economic downturn, you could be more successful — bigger and richer — than you were at the beginning of it.
In the recession of 1981 to 1982, businesses that continued investing in advertising saw growth of 256% compared to businesses that pulled their marketing efforts back. That’s a huge disparity!
Moreover, in the 2008 recession, businesses that kept up their marketing showed 3.5 times more brand visibility than their competitors.
The numbers don’t lie. Marketing is not something to shy away from, even if the economy looks bad.
No matter what the next few months and the year 2023 bring, don’t give in to the temptation to cut back on your marketing budget. Staying visible in the marketplace is akin to staying alive. While your competitors fall behind in profits, cowed by economic uncertainty, you’re going to prepare for recession by striding forward into the economic downturn with confidence.
Escalon has helped over 5,000 companies to optimize routine business functions and run lean. Talk to an expert today.