by Steve Dobbins, Founder and CEO
It may be the first week of summer in the Northern Hemisphere, but winter is coming. And with that winter, most economists and business leaders expect a downturn. In recent months, both YPO and Vistage — two of the world’s leading networks for chief executives — have polled their members and come to similar conclusions: Most CEOs expect an economic slowdown by the end of 2019 and through 2020.
The global economic advisors at ITR, who boast an impressive 99% accuracy in their forecasts, agree. After years of growth, we’re headed for a minor global recession in 2020. The good news: They predict this will be a small, uncomfortable bump in the road. The big recession won’t hit for another decade.
What does this mean for marketing?
Conventional wisdom might say it’s time to hunker down, cut expenses and play conservative to minimalize losses. While it’s definitely a time to work smarter, I’d argue that the eve of an anticipated downturn is the perfect time to invest more in marketing.
Unlike other expenses, marketing line items can be easy to cut. Pause your social media campaigns. Slow down your email cadence. Give your marketing responsibilities to a junior team member instead of paying outsourced fees to the experts. While your CFO might like these ideas, we think it’s the wrong strategy for success.
Consider these six points about marketing during a downturn:
1. Investment vs expense
Remove the term “marketing expense” from your vocabulary and replace it with investment. It’s tempting to view your marketing costs in the same light as other items in your budget, but marketing is more than that. It’s your lifeline to new and existing customers. Without it, your message goes unheard, your products unnoticed. It’s a classic “if a tree falls in the woods” scenario. You can have the world’s best products or services; but if no one hears about them, do they even matter?
2. Strengthen the core
Make sure you’re serving the needs of your existing customer base and maintaining a close touch during a recession. It’s less expensive and easier to get business from an existing relationship than building new ones — but they won’t hang around forever. Slow down your marketing and you risk being forgotten. Rebuilding that relationship can be even more costly than starting from scratch.
3. Effective marketing requires time and repetition
Regardless the economic conditions, frequency and repetition are key to converting customers. The “Rule of Seven” says we need to touch prospects seven times before they take action. In the 24/7 digital age, that number is probably conservative. Your value prop needs time to break through the noise. Brand awareness takes time to build. Your marketing dollars are part of both a short-term and long-term strategy for sustained growth. Drop the ball and you lose your momentum.
4. Keep your eye on the horizon
Every downturn has an upturn. Focused marketing and brand building during a recession primes you for more aggressive growth when the economy stabilizes. The 2020 slump is expected to be brief. You want your brand primed for exponential growth on the other side.
5. It’s time to shine
According to many studies, companies that increase spending during a recession see bigger gains in market share versus those who make cuts. When markets expand, market share is more challenging to acquire — there’s inevitably more noise and competition, making your message less likely to be heard. Recession marketing offers a unique opportunity to elevate your brand voice, build relationships and boost engagement.
6. Be smart
Maintain (or even increase) your marketing spend, but ensure you have the data to back your investment. Be vigilant in your metrics tracking and reporting. Make sure you’re leveraging technology to make smart decisions.* Give the data the attention it deserves, share insights with the broader team, and stay agile so you can adapt plans to reflect what you’re seeing.
No one wants another recession, but there’s no need to panic. Keeping a level head and committing to a long-term marketing strategy can help you flourish in the down cycle and be fully prepared to capitalize on the upswing.
Need help navigating this complex marketing landscape? Let’s talk.
*Stay tuned for a Q3 announcement introducing a powerful new Dobbins Group marketing technology platform that will be available to our clients worldwide.