Marketing in a Recession

Marketing Strategies for a tough economic climate

Economic slowdowns are unpredictable and history shows us that no two recessions are the same. Therefore there is a danger in blindly adopting a strategy that worked last time around. In the decade and a half since the last downturn a lot has happened, notably the massive rise in online and interactive marketing channels.

However there are some basic ideas that do seem to hold true over time and understanding these should help the marketer to succeed in this tougher economic climate.

Firstly, remember what a recession actually means to the market as a whole. It can be summed up in just two words; 'less demand'.

There is a smaller pool of potential customers during a recession. If you already have 100% market share, then your only option to retain revenues is to work harder at customer retention and upselling. For everyone else the opportunity to pinch customers from competitors still exists. However, since the cost of acquisition is so much higher than the cost of retention, the wisdom of the last 5 economic downturns has been to focus on retention.

Acquiring new customers is still something that should be attempted but most people agree that an adjustment of the retention/acquisition investment split is probably in order.

The tone of voice you use in marketing should definitely take the economic climate into account. The "you've never had it so good" in your face copy styles that seemed ok just a year ago now sound callous. Consumers will respond negatively to an offer that seems to ignore or laugh at their personal predicaments.

Your choice of media will also be affected by a recession. Traditionally direct marketing does well whereas TV advertising does worse during a downturn as marketing departments try to achieve a wider reach for a lower overhead. Many companies will be relying even more on cost effective Internet presence, for marketing products and services. Others will be moving from television to direct mail. However, switching to leaflet drops and magazine inserts may send the wrong message and harm a brand f it is not done with care and consideration.

Finally a word about email and online marketing. The delivery costs are so low in comparison to traditional media that any company not yet fully embracing these new digital methods of talking to their customers really should think again about their current strategy. Email marketing works and in a recession, email marketing can work better than ever before.

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