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Economic recessions can be daunting for businesses across various industries, but agile new ventures have a unique opportunity to thrive during challenging times. During economic downturns, businesses want to reduce costs while keeping operations going. Any company can be agile and provide value to customers, so it is about scaling up or down in a feasible manner to keep satisfying customer needs and wants.
While new ventures are typically more agile than many traditionally run businesses, they still are not 100% recession-proof. Similar to other businesses, budget cuts often target marketing functions. Even in our digital-first world, marketing hasn’t fully shaken its reputation of being expendable.
In a recession, it’s crucial to recognize the pivotal role marketing plays. Marketing connects a company with potential customers, creates mutual value and drives revenue. Here are the ways agile companies can navigate an economic downturn by focusing on marketing.
Related: Economic Downturns Don’t Last Forever — Here Are 5 Ways to Maintain Resilience During a Recession
1. Focus on demonstrating value
Prioritize customer-centric messaging, highlighting your product or service’s value to businesses. Instead of focusing solely on features, emphasize how you can help customers cut costs, boost productivity and weather the economic storm.
For example, your social media marketers could share real-life success stories or case studies. Don’t be afraid to showcase how your product or service has benefited existing customers–you could even pull direct quotes from interviews and use them in your campaigns. Highlight specific cost savings, productivity improvements, or business resilience achieved through your offerings.
If you haven’t, you might also want to develop interactive ROI calculators or cost-saving estimators on your website. Allow potential customers to input their data; the tool can estimate the savings or benefits they can expect using your solution.
Some business owners might prioritize more conservative strategies during tough times, like trimming their offerings to the basics. If discontinuing an unprofitable product or service line is on the table, halting marketing activities supporting that line makes sense. However, reducing marketing in areas where the company provides value to customers can be perilous.
Customers are always value-driven, even during economic downturns. While price sensitivity may increase, customers continue to buy products and services as long as they perceive value. Marketing’s role is to highlight this value, especially when customers reevaluate their purchase decisions. Missing out on marketing opportunities during crises can lead to revenue loss if customers abandon a product due to a lack of perceived value.
Related: 4 Ways To Sustain A Recession-Proof Business
2. Consider offering flexible pricing
Effective messaging is vital, especially for high-ticket products or services. Consider introducing a flanker brand that capitalizes on crisis-related pain points experienced by customers, emphasizing the product’s value proposition. The flanker brand could introduce an additional service tier to cater to price-sensitive customers who aren’t ready for higher-tier plans. This move will retain existing customers and attract new ones facing similar pain points.
You could also consider creating add-on services to augment your existing offerings. Having add-ons lets customers create a package uniquely tailored to their needs.
While modifying your offerings requires careful planning and alignment with the overall customer acquisition strategy, it could be the differentiator that sets your company apart from competitors struggling in a crisis.
Related: What Is a Recession and How Do You Prepare for One?
3. Adapt your messaging to prevailing conditions
Adapting your strategy to the market is always important, even more so during a downturn. Adjust your content, whether it’s articles, social media captions, or case studies, to focus on competitive positioning and highlight your value compared to other players. While productivity remains essential, focus on affordability and cost-efficiency as your primary messages.
One way to do this is by creating landing pages or blog articles that directly compare your product or service to competitors. Analyze pricing, features and customer reviews, highlighting where your solution offers superior value and cost-effectiveness.
Make testimonials, ratings and verified reviews more prominent on your website, and run social media campaigns directly related to social proof. When customers are more conservative in spending, seeing how a product has worked for others could be persuasive.
Adjusting your messaging might require increased marketing investment. You might also need to form partnerships to reach new audiences. Nevertheless, this approach lets businesses secure more customers and growth while eroding market share from competitors slow to adapt their messaging. Ultimately, despite higher spending, it’ll achieve a positive ROI, compensating for increasing churn.
Utilize times of crisis as opportunities
Marketing is indispensable during a downturn, and leaders who cut marketing spending risk harming their businesses in the long run. Crises present opportunities to improve and adapt to changing customer demands.
Marketing catalyzes change, bringing your value proposition to market and benefiting customers and your bottom line. If executed effectively, this approach can increase market share and position your company as a leader when emerging from a crisis.
Minimizing churn and downgrades is essential for almost any company, especially during a recession. By focusing on your unique selling proposition, attracting better-qualified leads and enhancing customer service and user experience, you can mitigate the damaging effects of churn and set your company on a path to sustainable growth.