How Small Businesses are Preparing Their Marketing Strategies for a Recession Marketing leaders share their perspectives on how to prepare your business in light of an uncertain economy.
Opinions expressed by Entrepreneur contributors are their own.
All of the talk of a recession is forcing small business owners to hope for the best and prepare for the worst. To understand how small businesses are preparing, I contacted several marketing agencies that specialize in working with entrepreneurs to grow and scale. Preparing for a downhill period of time is like cross-country skiing. You have to be prepared to weather the storm. To help, I've combined their feedback with the marketing strategies we're deploying in our company to be prepared for whatever the future may hold.
There will not be a one-size-fits-all approach. Your approach will depend on your current situation and the level of marketing you have deployed. In the larger end of the small business market, you will have a full marketing team and various agencies supporting your business. And at the smaller end of the spectrum, you may have a single marketing manager. Evaluate each of these strategies for how they will apply to your business and right-size them for your approach.
Create trigger points for shifts in marketing spend
If there is a recession, we can expect revenues to decline. If that happens, what will happen to marketing spend? It's best to plan these decisions ahead of time when you aren't under the stress of the moment. Where will you decrease spend? Where will you increase spend? What metrics will you use to measure the success or failure of initiatives? What is your target cost per lead? What's your target cost per new customer? These are all questions entrepreneurs are asking themselves and their marketing teams right now.
We're working on establishing baselines. It's like building a plane while we're flying. We're seeing some categories like advertising and email declining since the Apple iOs15 update, and it's hard to know when we'll reach the floor. Meanwhile, we're seeing others like thought leadership, influencer marketing and podcasting increasing, and we're not sure when we'll hit the ceiling. The key is to stay on top of the marketing mix and put in accountability to understand what is truly driving the needle we need to be moving. A rounded-out strategy will consider new account marketing, customer marketing and partner marketing for a holistic strategy.
Invest in the brand and messaging to stay ahead of the competition
Companies are doubling down on standing out from the crowd. Bob Gillespie, founder of Propr Digital said his clients are moving towards differentiating through powerful branding and messaging. "Brands are looking to stand out. And once they do, they want that differentiation to scale. We're finding companies are investing in their corporate brand and message on the front end and then carrying it through all of their campaigns in order to create stronger brand awareness in a more competitive marketing environment."
This is something we chose to do during the pandemic. We knew the market was shifting, and we couldn't compete on size as a small business. So, we knew we had to stand out and make every interaction count. We hired a brand agency to come in. They turned our brand on its head and came back with something that truly sets us apart in the market. Then we hired a messaging agency to come in and align our sales messaging. Now, we're focused on making an impact and being memorable at every touchpoint.
Be strategic about advertising spend and its purpose
If revenues decline, most companies will decrease their advertising spend. Steve Krakower from Harbor Marketing Agency says, "This will make it more challenging to scale." He recommends you ask yourself, "How do you acquire customers more efficiently? Focus on Return on Ad spend as your one big metric, and reset expectations. Growth might be slower. The days of putting $1 into Facebook and getting $5 out are on their way out. So, what we are trying to do is focus on brand building. We're putting out a lot of content to build a community around brands and businesses. Then we're supplementing that brand advertising with direct response advertising. It takes more sweat equity to get results than it did five years ago, and in today's market, brand building isn't optional."
He also recommends that you "are smart about your spend. You don't have to outpace the recession. You may not be as aggressive. You have to make sure you can weather the storm while positioning to scale after."
Combine forces to amplify resources
This is not a time to go it alone. Positioning yourself as part of a "full suite" implies better value; people assume the whole is greater than the sum of its parts. Brian Taylor from Goldiata Creative says, "Align yourself with other recession-proof businesses. Look for industries that will have less of an impact during a recession like government, healthcare and consumer goods."
We made a strategic shift to align with specific partners in our go-to-market strategy. We realized that with a small marketing team of three, we couldn't boil the ocean. We had to focus and take advantage of the marketing teams of our partners if we were going to make an impact. This has enabled us to align our sales teams on a joint account-based marketing strategy, leverage content marketing resources across both brands and increase the amount of lead volume sent to sales. That's a win-win. We're in a market where we recognized we're stronger together. Our partners have marketing teams that are more than triple our size. Why would we try to go it alone when we could be creating joint content and running joint promotions that maximize the reach of both of our brands? We have a powerful combined story to tell, so let's tell it.
Offer more social proof to increase loyalty
In a down market, everyone's reputation is on the line. And that means that every decision matters. Joe Dominick, partner at Gauge Media and owner of a small IT firm says, "In a down market, be prepared to offer more social proof. You want case studies and testimonials that will reassure people that the money they are about to spend won't be regretted. It's not about loyalty, it's about reducing prospect fear and uncertainty. Reputation matters. And theirs is on the line as much as yours."
We've invested heavily in case studies as part of our content strategy, understanding this will become more and more useful as time goes on, regardless of whether or not there is a recession. Social proof always matters. Look at how you can tell the story of your customers, and make them the hero. Your success is their success, and the more you can put them at the center of your marketing strategy, the better. Even in industries where you can't publish the customer's name, you can still publish it with the type of company and industry it served and anonymize it. The idea that we can't share our successes simply isn't true. There's a creative way to tell every story.
Entrepreneurs understand that we need to be thinking ahead and start making strategic shifts to prepare for a once again, unknown future. How you handle your marketing strategy could make or break your business. It's not uncommon for entrepreneurs to slash marketing budgets in a recession and rely solely on the sales channel. This is a strategy for failure as you need both to remain competitive. If you disappear from the market and expect people to remember who you are, you'll be disappointed. We live in an out-of-sight, out-of-mind culture. People will forget your business. And small businesses will need to find a way to do both to stay competitive. They'll need to be smart about it. The reality is that we won't be able to do everything. Thinking about where to strategically focus now will help right-size the workload so you can scale up or down as needed. Every down market presents great opportunities for small businesses to grow.