It is common knowledge that a global recession is upon us. The economic storm heading our way could be the worst since World War II, and many people already feel its impacts. Since US Inflation hit a 40-year high in June 2022 with an accelerated 9.1%, Central banks worldwide began fighting record-high Inflation by increasing interest rates. Raising interest rates helps slow economic growth by making credit more expensive, which reduces consumer and business spending while normalising prices.
However, slowing economic growth and increasing credit costs are hurting companies globally, forcing them to cut their budgets, lay off employees or even shut down operations.
Marketers must adjust to present circumstances in a global recession and learn to work with budgetary constraints.
In a recession, companies tend to reduce their marketing spending, but those that maintain and significantly invest do better than competitors who cut back. SEO, content marketing, social media, or public relations usually outperform competitors who have significantly cut their marketing budgets post-crisis.
At first glance, it may seem contradictory that companies that cut their budgets in times of crisis are worse off than those that started investing.
Three simple principles that explain this paradox
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The greater the share of voice of a business compared to its market share, the greater its growth during and after a recession.
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More prominent brands typically have more recurring customers and recover their marketing investments faster than smaller ones. “Out of sight, out of mind.”
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In a recession, there is less competition, so your brand has opportunities to succeed in gaining market share while investing in marketing.
The following characteristics of businesses that grew significantly both during and following past recessions typically are
- They were quick to react in a crisis
- They had a broad perspective
- They prioritised expansion above cost-cutting
- Resilience
Businesses must aim to accommodate these characteristics to navigate the next recession successfully. Companies should strive to accommodate shorter planning and decision-making cycles to be able to react to new challenges and opportunities.
As we move into a challenging 2023, the following marketing measures will continue to be a critical part of any business. Here are four key areas to focus on planning with a limited budget.
1. Content marketing: Producing high-quality, keyword-rich content is essential for ranking on search engine results pages (SERPs).
2. Social media: Besides promoting and regularly sharing stellar content, social media can directly affect brand visibility.
3. Public relations: By writing press releases and pitching stories to reporters, you can get your website mentioned on high-authority websites, boosting your SEO.
4. Inbound marketing: Stellar SEO-friendly content will attract visitors to your website and generate more leads.
Marketing in a challenging economic environment is never easy, especially as it often goes against the instincts and traditions of the industry if you don’t decrease but increase your marketing budget. Instead of cutting spending, now is the time to adjust. A recession can be an opportunity for companies to strengthen customer loyalty and lifetime value.
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