With the COVID-19 pandemic and the increasing fear of the profound impact it will have on the economy, many businesses and individuals are fearful about their financial circumstances. Between unemployment, rising interest rates, inflation, companies are preparing by looking to cut costs and save for an oncoming recession. Although the knee jerk reaction is to downsize everywhere, including the marketing department, the marketing industry has a unique position amidst recessions and there is a great importance for marketing during economic downturn. We will provide key reasons to the significance of marketing for your business during a recession. There are several opportunities to improve your company’s success through marketing strategies during a recession. Here is why!
Increased Market Share
Point blank: during a recession, there will eventually be decreased competition and an increased market share. Why? The major drivers of market share are campaigns and new product launches. Research and development is the biggest industry hit during a recession and therefore consumers are less likely to try new products. Fewer products are made across all industries. However, this leaves more opportunity to seize that available market share through marketing and advertising. With less research in developing new products, fewer new companies and products being made, there will even be more money in the budget to put towards advertising and capitalize on that newly available market share. Then you can funnel all of your resources towards existing products and services.
More Affordable Cost Per Lead
In a similar vein, during a recession, most companies will be looking to cut as many costs as possible. That horrible, endless bidding war to show up at the top of search results will become much more forgivable and feasible. With fewer people investing high amounts of capital in SEO content strategy, there is less competition and will make costs per lead more affordable. At a more affordable rate, you can capitalize, again, on that available space. In fact, some may argue that a recession is the best time to invest in good SEO strategy and digital marketing campaigns because you get more bang for your buck. During this time, your company has every opportunity to seize the opportunity and grow exponentially.
Cutting Marketing Costs Lead to Greater Loss
Many companies and individuals believe the best strategy is to stop spending, start saving, and cut costs on all fronts. This reaction is not uncommon, and not irrational, believing they can cut the marketing budget, and ramp up again when things got better. However, this is a very false notion, as cutting marketing costs during a recession will only lead to long-term financial loss. During a recession, the best advice economists have is not to change your business strategy. This applies heavily to the marketing field. Why? Because once you start cutting marketing costs, your search result rankings, brand awareness and loyalty will diminish as well. Once those aspects of your company start diminishing, they are very expensive to get back on track and will end up costing more money at the end. The worst thing a company can do is to cut marketing costs during economic hardships. It is highly advised to find other forms of cutting costs. History has shown that companies who maintained higher levels of marketing during tough financial times came out more profitable in the end. It is advised to view marketing as an asset and investment, as opposed to another expense.
With the COVID-19 pandemic keeping the country under home quarantine, this presents a unique situation for businesses. Most companies are forced to operate remotely and rely on digital services, entertainment, and e-commerce to stay in business. Individuals from every age and ethnic group are living digitally – either for work or for entertainment. The best thing to do during this type of recession is to capitalize on this time, whether it is building your brand awareness and loyalty, or capitalizing on campaigns that may have been drowned out by competition in the past. Always remember: recessions are only temporary, and businesses that have enough foresight can actually come out more successful.
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