As some businesses reopen in parts of the country, the collective anxiety is palpable. While hysteria about the virus has subsided for many, a new dread is hanging over our heads: the future of the US economy. While it's hard to predict just what will happen in the next few months, entrepreneurs must be prepared for a continued downturn or full-scale depression. While every economic downturn has its unique characteristics, the truth is all start-ups and small businesses should be diligent in continuing sales and marketing efforts regardless of what is to come for the remainder of 2020-- historical research tells us that pulling back the reigns in these areas could negatively affect your business in the long run.
1. Don't Kill Your Marketing Department In 2009, a Harvard research team studied dozens of companies through multiple recessions to identify behavioral patterns that correlated with their economic recovery. What they found was as consumers set stricter priorities, businesses reduced marketing expenditures in all areas from communication to research. The data showed that such indiscriminate cost-cutting was a big mistake. The problem that most businesses face is that the marketing efforts are usually disproportionately affected during times of cut-backs. The problem being that during a recession it's vital to understand that loyal customers are the life-blood of your business and the primary, consistent source of cash flow and organic growth. "Marketing isn’t optional—it’s a “good cost,” essential to bringing in revenues from these key customers and others," says John Quelch and Katherine E. Jocz in their 2009 HRB article.
2. Understand Your Audience Better So how do you continue marketing while budgets are being slashed? In the Harvard study, the call-to-action was for companies to take a closer look at their customers and the changing psychology of those who are still buying.
3. Find Your Opportunities Building and maintaining a strong brand is the best way to create loyalty and mitigate risk. During an economic downturn, it is more important than ever to produce the highest quality content that speaks to your customers and meet them where they are. The first step is to determine which camp your customers belong to (see chart above). Are they "Slam-on-the-breaks" types as or are they more "Live-for-today"? This answer will help you determine exactly how to pivot your communication if needed. Client psychology can also help to shed new light on your services and products. That means taking a long, hard look at your sales reports and doubling down on what is performing and letting go of everything else-- for the time being. 4. Take the Longview When sales start to slip, panic strikes. During an economic downturn, the last thing your team should be doing it changing course. It is not the time to shift positioning or alter your core target client. The temptation to do so may be strong. While you might have some immediate success, the long-term effects could be devastating for your business. Consistency is key to any effective marketing strategy. Focus on reinforcing the reasons why your brand matters and lean into market trends. Research and data are your friends. Keep your finger on the pulse of conversations happening across the internet and on your social platforms. Have your team reach out and be genuine in your approach. Be sure to share, discuss, and brainstorm the ways to improve your strategy as these conversations progress and new data populates. Marketing is a conversation between your brand and your customers. Be sure you are communicating clearly *and* listening well. 5. Be a Chief Marketing Officer (or outsource one) Since sales and marketing are the most crucial factors for business success, it is important to make sure this leadership role is filled. Although starts-ups and small businesses rarely budget for c-suite executives, it is crucial to have an experienced team by your side during a recession or economic uncertainty to help navigate the strategy and stay consistently "on brand" in a way that makes sense for your customers. Data speaks volumes. Take what you learn from your marketing reports and be sure to constantly iterate, listen to your audience, and improve the quality of your execution. Marketing today is more of a science than an art. Trends and algorithms change every week. It is vital to have someone at the helm who is knowledgable and experienced to guide the team in reaching their goals. If you need help understanding how to interpret your marketing data, check out this blog "How to Use Data to Grow your Business". You can also send me a direct message on LinkedIn if you have any questions. I will reply with a detailed explanation for whatever is blocking your path.
Still need help? I am a virtual Chief Marketing Officer passionate about helping entrepreneurs grow and scale their business. Let's schedule your free 30 min discovery call where I'll share tangible, tactical advice on how you can create or improve your sales-focused marketing strategy. Book Now.