Boosting Marketing May Be The Key To Weathering Economic Downturns
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At TechCrunch Disrupt 2022 in San Francisco, Gyanda Sachdeva, vice president of product management at LinkedIn, opened a session titled “Marketing in Any Weather: Making the Right Decisions in Challenging Times,” saying , “…it's real, it's too bad. The idea is to reduce marketing costs during a recession.
This corporate wisdom may seem counterintuitive to the executive crowd: Most companies respond to cutting back on marketing, but Sachdeva argues that during the most turbulent times companies face, it should be stepped up. However, historical data shows that companies that spend more on marketing during an economic downturn tend to grow after the recession.
"More than 100 years of research on this topic shows that companies that increase their marketing spending during a recession tend to grow in the years after the recession," Sachdeva said.
Here are three concepts that executives should apply effectively to the market during an economic downturn, no matter what stage their company is in. With a combination of marketing tactics, any business can emerge stronger from economic instability.
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Start a new business
Sachdeva cites a recent LinkedIn report that shows the entrepreneurial spirit is alive and well, even in tough economic times. The report shows that in the first 10 months of 2022, 274,000 new companies were created, 226,000 people became founders for the first time, and 1.1 million employees joined these startups.
In a less-than-ideal economic period, the startup's headcount has also quadrupled over the past three years. While this may seem counterintuitive, history supports this metric. In fact, General Electric, IBM, HP, Salesforce, Microsoft, Airbnb, Uber and Venmo were born during the economic crisis and became the giants we know today.
Why do gloomy economic forecasts inspire new brands? Research from the Marketing Institute (MSI) explains that the recession has shifted buyers' attention to lower-quality startups. This is because in such times, the added uncertainty makes the company's best product: capital is limited, the margin for error is even smaller. These recipes have given rise to some of the world's most famous brands.
Iterate, refine and relaunch your marketing efforts
Existing brands have their own challenges, including visualizing content creation in a changing economic landscape. As marketers, we're usually only as good as our latest new idea and how well we can execute it. However, recession marketing has changed the tide. Sachdeva suggests that this may be the best time to replicate successful creative assets. Finding new materials takes time, energy and resources that can be overwhelming for companies trying to stay afloat.
“Old creators don't grow old; It also prevents companies from stumbling on untested creative concepts that may not work, wasting time and money.
Deep roots with brands that consumers already know and love also strengthen the company's existing organic presence. Perfect if you're on a tight budget. Sachdeva talks about reviving existing fans with "high-profile formats" like newsletters, podcasts and live video events. This will energize the community in difficult times and help lay the foundation for periods of strength. This tactic effectively reduces your advertising costs and makes your marketing more profitable.
Sell to your future buyers
Regardless of the economic landscape, successful businesses are always selling to their future consumers. Every professional marketer experiences this every day. According to Ty Heath, director of marketing at LinkedIn, 95% of B2B and B2C buyers are not yet ready to buy a product or service.
This means that the company continues to sell to potential customers even during economic booms. According to Sachdevan, this "95-5 rule" turned into the "99-1 rule" during the recession. The number of potential off-market buyers increased by 4% as more people delayed their purchase decision. For this reason, Sachdeva cautions executives not to focus on the short-term at this time, as short-selling opportunities are always scarce.
Instead, the best strategy is to manage marketing that continues to serve an increasing number of long-term growth opportunities. This ensures that the focus of the campaign is not on blocking marketing, but on how people discover the brand when they are ready to buy. Which, as history has shown, is best achieved with consistent, forward-looking marketing efforts.
Peter Veltman is a PR and communications strategist and founder of Man of the World Media.
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