Are You Ready for Marketing in a Recession?

Is a recession on the horizon? Whether one is or not, it would be wise for CMOs to be prepared long in advance of when their organizations experience a real decline in revenues or revenue growth rates.

Historically, the smartest marketers where the ones who took advantage of a recession and increased their share of voice (a measure of ad spending) either by temporarily increasing or at least maintaining ad spending. This strategy was confirmed by the famous PIMS (Profit Impact of Marketing Strategy) studies in the 1970 and 1980s.  In 2001, a deep but short recession negatively impacted manufacturing and our largest B2B client. We had already discerned that their major competitors, who were also share of voice leaders, would be cutting their ad spending in the second half of the year. Citing this information and the PIMs study, we recommended that our client maintain their ad spending which would give them temporary leadership in share of voice and send a message to their national distribution network that they were behind them.  To sweeten this recommendation, we volunteered to take a 90-day “agency fee holiday” while increasing the intensity of our marketing services at the same time.  The outcome was fantastic as the client took advantage of the timing to reposition their business which resulted in leadership in a profitable and growing line of business.  Our strategic marketing agency also benefited from this time as we helped our client grow new business lines over the next nine years.  But would this strategy work today?  With the possible exception of the largest global consumer brands, I don’t think so.

Total ad spend is much less relevant today than it was five or ten years ago because of the dramatic shift to digital content marketing.  According to E-Marketer, digital advertising spending will surpass television advertising spending in 2017.  More importantly, 64 percent of current digital advertising is driven by mobile marketing which is growing even more rapidly.   Marketers’ goals have also changed. It used to be that achieving awareness gains was most important.  Today, marketers care more about achieving gains in engagement.  Therefore, marketers need to provide access to the content that consumers need the moment they need it in order to move them along the marketing-conversion-relationship (MCR) funnel.

So how can you be ready for marketing in a recession? By ensuring you are mastering and applying the same MCR strategies in a growing economy.

1. Marketing Strategies: First, know your target audiences and their personas. Use your customer database. Preferably enhance it through big data. Leverage analytics and programmatic platforms to understand your audience’s current needs based on their online contextual and behavioral habits. Craft a multi-tier content and lead-generation plan to ensure you can create and deploy relevant content for each segment. Create the channel plans and programs that serve the most relevant content at the right time and the right place so that you add value to your target’s knowledge and decision-making processes. Re-target prospects with deeper and richer information. Always present your brand consistently.

2. Conversion Strategies – At the point of decision-making, your target is evaluating you against your competition. Make sure your communications are highlighting your key advantages. Ensure that case studies, performance reviews and customer testimonials are accessible on-site and in-stream. Create and deploy the decision-making tools that can enable the prospect to evaluate pricing, ROI or other benefits.  Enable professional online chat and customer sales support wherever appropriate.

3. Relationship Strategies – Every time you convert a new customer, you want to nourish the relationship from the very beginning to create a fan for life. Make sure you manage the customer experience for an easy and successful sales experience.  Create feedback loops for customer input to ensure satisfaction.  If there is a problem, over-devote time and resources to resolve it immediately so that customers know you care.  And create a customer relationship marketing strategy to ensure that your customers will provide the word of mouth support that you need to build your community.

These principles apply to both B2C and B2B marketing.  Most companies have general strategies mapped out to address these areas, but they are often informal and fragmented.  It is best to have a written, integrated MCR Master Plan that is developed by the team responsible and accountable for implementation, monitoring and performance improvement.

May 31, 2016
Written by Tom Sullivan