Marketing During A Recession: What To Keep And What To Cut

Consumers are cutting back. In a 2022 survey, KPMG found that one third of respondents have had to spend savings in order to meet the higher cost of living. We’ve seen a downward trend in consumer confidence, with the GfK indicator showing UK consumer confidence to have fallen from -42 in December to -45 in January, defying expectations for improvement. Consumers aren’t the only ones cutting back, brands are too. With marketers facing severe budget cuts, the question is, what to keep and what to cut?

What To Keep

Online Visibility

In today’s digital age, online visibility is crucial. The internet has become the primary source of information for consumers, so if you’re not honing your online presence, you’re missing out. The good news? Digital strategies are some of the most cost effective.

With over 4.89 billion social media users worldwide, up by 6.5% from the following year, social media is arguably the most effective strategy for increasing online visibility. Data shows that 90% of Instagram users follow a business, with two in three surveyed interacting with brands on the platform. Whats more, 50% of those surveyed claimed to be more interested in a brand after seeing ads for it on Instagram.

Content marketing is your greatest ally, costing 62% less than traditional marketing efforts. 70% of people would rather learn about a brand through content rather than advertising, but there are a lot of brands out there putting out a lot of content. Focus on developing a strong content strategy, offering unique valuable content that will cut through the noise. Set goals for your content marketing efforts. Are you hoping to drive traffic or generate leads? Defining your goals will help to streamline your strategy, improving the effectiveness of your efforts.

Search engine optimisation is another valuable strategy to keep. SEO involves improving your rankings in unpaid organic search, so it does not incur a direct cost. Improving your ranking can also help to lower other marketing costs in increasing organic traffic and reducing the dependency on paid channels.

Customer Retention

Brands cutting back on marketing spend may find it difficult to obtain new customers. The solution? Focus on nurturing existing customer relationships. This strategy goes hand in hand with content marketing, providing your audience with valuable information designed to retain customers. You can help keep your business top of mind for existing customers by making use of loyalty programs, email marketing and improving the customer experience.

Email marketing can be highly cost effective as it tends to produce a higher conversion rate than other channels. According to findings from the DMA Marketer Email Tracker report, in 2019 email ROI shot up to £42 for every pound spent, with the lifetime value of each individual email address rising by 33% year-on-year. When marketing to your existing customer base, email marketing may prove even more effective than social media efforts. Data shows that email subscribers are 3.9 times as likely to share your content on social media, with 4.24% of visitors likely to buy something, compared to 2.49% of visitors from search engines and 0.59% from social media.

However, be sure to develop your email marketing strategy, as 47% of email recipients have been shown to open an email based solely on the subject line. You can also make use of personalisation. Personalised marketing messages are often more effective in converting leads into customers in that they speak directly to the needs of the individual. This can be a powerful tool in building brand loyalty.

Emphasise your value proposition. As consumers become increasingly focused on finding deals and discounts, tailor your marketing comms around the benefits of your product or service that differentiate you from other players in the market.

What To Cut

Rebranding

Adapting your brand to appeal to a wider audience may be tempting, but rebranding requires a lot of marketing spend and during times of recession it may not be the best use of funds. Stick with what works and focus on building your existing customer base.

Non-Digital Strategies

If resources are limited, you’re best allocating these resources towards digital marketing efforts. Physical ad campaigns are not only costly but lack the real time insights offered by digital campaigns. These insights allow you to see what is working as opposed to what isn’t alongside the flexibility to adapt campaigns in accordance with audience response.

So, how should brands communicate during the cost of living crisis?

Head of strategy at FutureBrand Paris, Katie Vanhoutte, advises against using empathy as a communication tool, encouraging companies to demonstrate meaningful action. However, brands should not refrain from communicating with their audience during this time. According to Kantar, even amidst the height of the Covid pandemic, only 6% of people thought businesses should stop advertising.

Inevitably people will begin to tire of communications centred around the cost of living, instead seeking escapism, so get creative with your marketing efforts. Think about ways in which you can communicate with your audience that are unique and exciting.