Whether or not there will be a recession is still up in the air, but there’s still a lot of economic uncertainty ahead.
When it comes to tightening your budget, it’s tempting to look at marketing as the first candidate for the chopping block. However, there is a strategy for how you should allocate your spend, and it starts with understanding buyer behaviors.
Buyer Behaviors During a Recession
Buyers can be grouped into several distinct categories depending on how they react to a recession.
To identify where your customers would fall, first think about what you sell. Products could run the gamut from essential items to luxury items and services.
Buyers may range from people who will immediately cut all unnecessary spending to those who are financially comfortable and won’t make a lot of changes in their spending.
Harvard Business Review coined this range of buyer behaviors “slam on the brakes”, “pained but patient”, “comfortably well off” and “live for today.”
It also depends on the severity of the economic downturn. A slight dip means fewer changes in buyer behavior, while more extreme changes mean more extreme cost-cutting.
Smart Spending for 2023 Marketing
Regardless of what happens in the economy, don’t completely stop your marketing or make cuts without thinking it through.
It’s tempting - marketing can seem like an easy area to cut. But there are a few reasons to think twice before doing that, according to The Business Journals, including:
- Your competitors might not be cutting back. Cutting your budget when your competitors don’t can put them at an advantage.
- You won’t recover as easily after the recession. You’ll have to make up for lost ground and may need to hire new team members, putting you behind.
- You might put your goals in jeopardy. Marketing budgets should be goal-oriented. If you cut spending, you may not hit your sales and ROI goals.
A smarter move is to adjust based on your buyer behaviors, the products you sell and where they fall on the risks associated with a downturn
For example, if your product falls in the category of something that is not essential to live with, but is justifiable, you can tweak your marketing and promotional efforts to hold prices down, reward loyal customers and advertise the quality of your product
In fact, Adweek found, as reported in Better Marketing, that companies that cut administrative and production costs during a recession do well, but those who cut costs for marketing and quality tend to do worse.
Strategy is key - make sure you know where your money is going and where it’s getting the best return. Consider the industries you are targeting and if there are others that might be more recession-proof.
Messaging and Content During a Recession
With concerns about budgets, spending and possibly shrinking sales, many people make the actual messaging of their marketing an afterthought. But it’s important to strike the right tone.
First off, don’t ignore the elephant in the room - acknowledge the fact that the recession is happening. Not doing so may come off as tone-deaf or out of touch. Depending on your persona and their recession buyer behaviors, you can adapt the messaging accordingly.
Second, build an emotional connection with your leads and customers. Mention the things you offer that are important to customers right now - for example, solid lead times, a best-in-class return policy, simple ordering, and incentives or promotions. Make yourself a stable voice in a changing world.
No matter what happens with the economy, as you plan for 2023, it’s a good idea to review your strategy and ask what’s working, what’s not working, and what you want to try to earn the best return. Be sure to check out our recession planning resources to help you plan smarter for next year.