Between the supply chain issues, soaring gas prices, and layoffs happening left and right, we can't catch a break. Right when we thought we were returning to normal after COVID, we're now bracing for a recession in the US (some would argue we are already in it).
As a marketer, salesperson, or business owner, this has been a challenging time to sell anything. The market condition requires everyone to think creatively.
In a bull market, everything is more accessible. Buyer confidence is high and capital is flowing in. But having to sell or market when budgets are tight and people are skeptical about spending, it has every marketer gone to the drawing board to rethink their marketing strategy.
You need to focus on what works for your business. Looking into the history of the great companies that grew during recessions, you will notice that they all did what worked and made sense for their business.
It's not about growing or making profits. Your marketing strategy should be around how to keep the company surviving, and whoever makes it to the other end wins.
What's a recession?
A recession is when there are two straight quarters of decreased economic growth (GPD). Some venture capitalists and financial advisors believe we're already in a recession. If you're a founder or at a startup, you know that raising money has likely been a challenge.
PayPal Growth Hack Strategy
During the dot-com bust, Paypal knew it needed to accelerate growth on its platform if it wanted to stay alive. So, Paypal created a referral program where they paid users to invite others to their platform. This successful campaign pushed PayPal from 7% to 10% growth, pushing their user base to over 1 million users! Paypal was able to growth-hack its way to survive the downturn.
You don't always have to spend paid ads to acquire new customers. Incentivizing your loyal customers to share something and rewarding them for it can be a viral move.
Dominos Investment in Product Improvement
During previous recessions, Domino's shifted its marketing strategy to focus on its customer. Even a bad business can make money during good times, but once a downturn happens, only the companies creating value survive.
Dominos knew that to survive the down market, they had to do something different. They were widely known for not having the best-tasting pizza and poor customer service. They improved their ingredients, investing in technology to make their process more efficient.
They even invested in marketing campaigns admitting their product wasn't that good and had made improvements to it. They invited new and old customers to check it out for themselves!
Ultimately, investing your marketing dollars into your product can save money in the long run and create longer customer retention.
Lego Explored New Territory
During the recession, you can imagine non-essentials tend to suffer; buying toys for kids doesn't always make the cut. Lego saw that the markets in the US were down, while markets in other countries weren't affected. They opened international markets and were able to continue their business at a time when most were shutting down.
As a marketer, you have to know the difference between if your market is dead or down. It can be tough during a recession to determine when things will bounce back and how long it will take. Sometimes, you are better off shifting your marketing strategy to a different market entirely. This marketing strategy can apply to the location, product lines, and other demographics.
Harley Davidson Created Community Engagement
During the recession in the 80s, Harley Davidson brand needed to come up with a creative way to ensure their brand was top of mind. Harley Davidson restructured their entire company to focus entirely on the customer and created a Harley Davidson rider community.
They discovered more about their user and the products that would add value to their customer. Their roadside assistance and other perks were born from this marketing strategy.
Allstate Direct Mail Marketing Strategy
Allstate was founded during the Great Depression! Imagine building a business during what is generally considered the worst economic downturn in American history.
Allstate wanted to create a sense of security for its customers and branded the company slogan "You're In Good Hands" to assure users that Allstate was trustworthy during hard times. Very fitting for an insurance company, right? Well, that's not all they did. They also invested in direct mail advertising in the Sears catalog to attract new customers!
Picking a Marketing Strategy That Works for You
When picking a marketing strategy for your business, analyze what is working and what could be the most significant opportunity to keep the company surviving a recession. As you can see, the companies above all did something different to keep their businesses going.
Not every playbook will work for your business, so it's about picking the one that makes the most sense. Here are some questions to ask to determine the best marketing strategy forward.
What Drives Revenue Today?
What do your revenue streams look like today? Are some staying flat, others declining? It's important to know where the business stands today. Look at the entire scope from end to end. You might find one product that seems less affected or a revenue channel that is growing.
Speak With Customers & Check NPS Scores
There may be some golden opportunities you can discover by just speaking with customers.
Is there a service they wished you offered that they would pay a premium for?
Is there an industry that you are not marketing to but is your bread & butter?
Is there a certain point in your process that customers tend not to return?
Speaking to customers and checking NPS scores is a great way to determine a marketing strategy. As we saw above, companies like Dominos paid close attention to their customers to help plan their strategies to improve. You will be surprised by the lost opportunities you might find under the hood by not speaking with your customers.
Look at Customer Retention
As marketers, we know a new customer will always cost more than targeting an existing customer. You may cut budgets in your marketing spend but working with the sales team on a retargeting campaign or nurturing campaigns can be more cost-effective. For Paypal, they needed to create some sort of retention for their product.
They knew that if users had more friends and family on the platform to send money to, it would make their product stickier for the customer. Their strategy proved successful in gaining and maintaining users on their platform.
Check Marketing Channels
When times are good, you want to test everything, and you have the luxury of trying some things that don't work. During a recession, you don't have that luxury. So cut any testing channels that aren't bringing a return or are simply nice-to-haves. Check what is working and see if there's a missed marketing opportunity. Don't limit your marketing efforts to just one location, product line, or demographic. Lego could survive a down market by expanding its products to Europe.
Once you have analyzed your revenue, retention, and marketing channels, it's time to reallocate the budget. You may be able to generate more revenue by spending less. Zappos cut marketing budgets on Google during the recession but found cheaper ad spaces like carts in airports. You might find that investing time in content is a more decisive win than banner ads on YouTube. Whatever it may be, it's time to do more with less. Pick the strategy that allows you to do that.
As marketers, it's time to get creative and narrow your focus on a winning strategy that will allow your business to survive a recession. We learned great marketing strategies from companies like Paypal, Allstate, Harley Davidson, Lego, and Dominos. These marketing strategies prove practical tools and ways to grow your business during a recession. Check your data, precisely revenue, retention, marketing channels, and spending, to see opportunities that fit best for your business to create a winning marketing strategy!