Do not immediately cut the marketing budget
Most businesses will cut their marketing budget when faced with an economic downturn, which is exactly why not cutting the marketing budget is a smart marketing strategy. If all your competitors are cutting their budgets, and your business is taking time to fine-tune and continue with marketing efforts, then your business could see an increase in revenue and take over a larger market share. When competitors slash their budget, consumers will be less likely to see their marketing efforts and instead will see your company’s presence more frequently. Prospective customers will be able to easily see the services or products your business offers.
Conduct new market research
It is common knowledge that having accurate market research is vital for successful marketing campaigns. Market research can give a business a better understanding of its customers and better knowledge of how to approach its target market. That being said, the market research needs to be accurate and reflect the current customer. So market research from February 2020 that is pre-COVID would be inaccurate now. During financial hardships, a person’s income and discretionary income change.
This, in turn, changes the way consumers shop and make purchasing decisions. New data needs to be collected, and while it might seem like a smart idea to cut costs and use historical data from previous recessions, it is not a good idea. People change as their environment changes, and each economic downturn is caused by different factors, so no recession is the same. By doing expansive market research on your target audience, your business will be able to get insights that can be used as a competitive edge. A business that can align itself with its customers’ needs through market research allows for the business to thrive during and after the recession.
Focus on retaining existing customers
Customer retention is always an important business strategy, especially during a recession. A majority of business profits come from existing clients or customers, and the cost of retaining customers is much lower than the cost of trying to attract new customers. One thing, we have noticed during this recession first-hand is that new customers are not likely to give unfamiliar products and services a try, which is why the focus should be on existing customers and keeping them satisfied. Shifting the focus to existing customers will cut down on spending without slashing the marketing budget. Keeping customers satisfied will only benefit the business in the long run, because these customers are more likely to leave positive reviews and recommend your business to their friends, which gives your business free word of mouth marketing. Retained customers could be the reason your business survives the recession and comes out ahead.
Analyse past and current performance metrics
Performance metrics can indicate whether your business is meeting your goals or is on the right track to reaching your goals. These metrics can help improve strategy and can be early indicators if things are not going as they should be. During a recession, tracking metrics is even more important as one mistake could lead to the business’s downfall. Businesses should look at their past performance metrics to help guide decisions. Tracking current performance will also allow for the business to see how the marketing campaigns are doing in this unusual landscape and time. The combination of past and current data will allow businesses to invest their time in areas that have proven to work in the past and see if what was working is still working today.
Remain consistent
Now is not the time to rebrand yourself or your business. While you might think doing a rebrand will differentiate your business and bring in new customers that is unlikely to happen and most likely result in loss of profits.
Businesses should remain consistent in their name, branding, marketing and customer interactions. Your business should not go from sending bi-weekly emails to bi-monthly emails, nor should it go from weekly blog posts to monthly blog posts. These efforts of staying consistent will also keep costs down, which in a recession, is vital. While the recession is going to impact your business in some way no matter what strategies are used, these strategies can help you come out the other side stronger.
Businesses have taken hits because of the COVID-19 crisis, but the recession is not forever, and the re-evaluation of a marketing strategy can help businesses survive this uncertain time. Businesses should study the market and make decisions that will benefit them.
BONE PRINCE LEKGOTLA*
*Bone Prince Lekgotla is a lead consultant at Infinite Capabilities whose expertise includes business development, accounting and taxation
