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With the economic slowdown of 2022 still fresh on everyone’s minds, the possibility of a deeper recession in 2023 is a daunting thought for businesses everywhere. Analysts at Bloomberg suggest there’s a 100% chance of a recession in the coming year, and any business that isn’t prepared could be put in jeopardy.
However, with the right marketing strategies, companies can not only prepare for the worst but also come out on top. Marketing budgets account for up to 40% of a firm’s expenses from revenue, so it’s essential to be strategic about how you allocate your marketing dollars. Here are five tips to ensure your company stays afloat during a 2023 recession:
1. Focus on long-term ROI
During a recession, it can be tempting to cut expenses that don’t show an immediate ROI. Content marketing, for instance, takes time to show results because it can take weeks or even months for content to rank, for your website’s authority to grow and for people to start trusting your brand as a thought leader.
Once your content gains traction, however, the rewards can be long-lasting. Put your marketing budget into creating quality content that will still be relevant a year from now. It’s the best way to ensure you have a steady stream of leads long after the recession has ended.
Interactive content is one strategy that is especially effective in this regard, as it can be easily shared and often creates long-term engagement. My company, involve.me, makes it easy to create interactive content with no technical skills needed.
In comparison, advertising spend can bring immediate results, but it might not last. Like a faucet, if you reduce advertising spend, or as ads simply become less effective over time, you’re going to lose leads and sales. If there’s little organic traffic to make up for lost advertising, you may find yourself in a worse situation than when you started.
2. Take advantage of low-cost channels
While it’s valuable to experiment with different marketing channels, they can have wildly different costs. In the last Super Bowl, for instance, 30-second commercials cost around $6.5 million and reached an average of 106 million viewers.
That’s a CPM (cost per mile, or cost per thousand views) of around $61. That could be an effective investment for some companies, but it’s not practical for most. The CPM for TikTok ads, in comparison, ranges from $0.50 to $10, and it’s possible to reach a large audience without ads at all.
Organic TikTok videos, from dance challenges to creative product demonstrations, can go viral and create a massive amount of impressions. This is a great option for companies that don’t have the budget for expensive ads but want to reach a large audience.
3. Go local
During a recession, it’s important to focus on your local area. Local businesses are more insulated from the volatility of the stock market and international trade wars, and they generally have more loyal customers.
Make sure your website and other marketing channels are optimized for local search, and consider running hyper-local campaigns for your products or services. Also, look for opportunities to partner with other businesses in your area. This can help you get your message out to a larger audience and build trust with potential customers.
You can also use your marketing budget for physical campaigns, such as sponsoring a local event or running a cost-effective ad in the local newspaper. This will help you reach potential customers in your area and build a base of loyal customers that will stick with you even when the economy recovers.
Further, local search engine optimization (SEO) is becoming increasingly important. Investing in local SEO means you can reach potential customers who are actively searching for services in your area.
4. Focus on reducing churn
Even in the best of times, customer churn can be a major issue. Like pouring water in a leaky bucket, it’s hard to keep customers if you’re constantly losing them.
During a recession, when businesses are struggling for customers and revenue, it’s especially important to focus on reducing churn. Invest in customer retention strategies such as loyalty programs, customer feedback systems and personalized offers. This will help you keep your existing customers and build relationships with them so they are more likely to stay with you in the future.
In practice, these systems don’t need to be complicated. For example, you can track customers who haven’t used your product or service in a certain amount of time, and then email them with a personalized offer or reminder. In that email, you can also include a feedback survey to help you understand why they haven’t been back and what you can do to win them back.
5. Double down on automation
Finally, consider investing in automation and process optimization. During a recession, it can be tempting to cut costs and staff, but automation can actually help your business become more efficient and increase your profits.
Invest in automation software for your marketing, sales and customer service teams. This can help you save time and money by automating repetitive tasks, such as email campaigns and lead qualification. This will free up your team to focus on more important tasks and help you get better results from your marketing and sales efforts.
Popular tools such as Zapier and IFTTT can be used to automate tasks and workflows, and they’re very low-cost.
The 2023 recession is almost inevitable, and many businesses will struggle to survive. However, with the right marketing strategies, you can not only make it through the recession but also come out on top. By focusing on long-term ROI, taking advantage of low-cost channels, going local, reducing churn and investing in automation, you can ensure your business is well-positioned for success in the years ahead.