We all know far too well about the state of economic uncertainty. What's on the mind of chief marketing officers during these times?
According to Forrester’s Q3 B2C Marketing CMO Pulse Survey 2022, 95% plan to increase their marketing budget next year — significantly for 52%.
But for CMOs, deciding what exactly to prioritize and where to focus their funding can be a real challenge during an economic downturn.
Invest in Current Customer Base
Tom Wentworth, chief marketing officer at Recorded Future, agrees that a customer-first strategy is essential during an economic downturn. "In a tough economic environment like we're facing now, the best place to market is to your clients,” Wentworth said. “Help them get more value from what they already own, and they will be more likely to buy more from you in the future.”
In a LinkedIn Live with CMSWire, Wentworth also discussed the do's and don'ts of marketing in an economic downturn. On his "do" list: privacy, branding and becoming more like a media company by creating valuable content that goes beyond marketing content and takes a page out of the journalistic playbook.
Brand Awareness, New Marketing Strategies
Victor Elmann, CMO of Circuit City Corporation Inc., understands the recent economic downturn might be tough on businesses, but he believes it’s also a time to step up your game.
His current priorities include:
- Customer retention: Keeping existing customers during a recession is more important than ever. Businesses should focus on creating loyalty programs and offering incentives to customers. Additionally, they should make sure that their customer service is up to par.
- Increasing brand awareness: Companies should focus on creating a strong online presence and using social media to increase brand awareness. Additionally, they should make sure that their marketing campaigns are targeted and relevant.
- Developing new marketing strategies: Businesses should focus on research and innovation, making sure their campaigns are effective and efficient.
“By improving customer retention rates and increasing brand awareness with new strategies like social media campaigns or email, you can increase your chances for success during tough economic times,” Elmann said.
Related Article: Optimistic or Delusional? The Chief Marketing Officer 2022 Outlook
Efficiency, Targeting and Tailoring
Brian Gilman, CMO of IntelePeer, said to prevail in today’s environment, it’s imperative marketers are involved in almost every department of their organization, from sales to HR, understanding the basics of metrics, conversion rates and the value the department brings to an organization in order to have full support from the C-Suite.
Currently Gilman’s priorities include:
- Efficiency: Especially during an economic downturn, marketers need to pay close attention to spending efficiency. Are your working dollars returning the way they did before the downturn? If not, you should begin to reallocate these funds to channels that are performing better.
- Targeting: When downturns happen, sometimes casting a broad net isn’t the best course of action. Targeting particular customer spending profiles allows for lower costs and higher production campaigns.
- Tailoring: When investments aren’t as abundant in emerging technologies, you want to tailor your messages to specific industries. By going vertical, you can become highly relevant within that particular industry.
“To maintain consumer expectations, marketers should focus on tailoring campaigns and outreach towards individuals or an industry where you may want to be considered a leader,” Gilman said.
Related Article: Handling CX in an Economic Downturn
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Say No to Maintaining the Status Quo
Tobias la Cour, co-founder of the digital marketing agency, Somebody Digital, said maintaining the marketing status quo during challenging times is not the answer because when economic change impacts customer behavior, it’s business behavior — not the budget — that needs to pivot.
From his own experience, he employs five principles for making digital marketing work during a downturn.
- Don’t stop: When organizations pull back on their digital marketing efforts and related media spend, they’re pulling back on their visibility, too. In the short term, this increases the risk that their brand or product will not be top of mind when a need arises for the consumer.
- Get ready for opportunity: Reduced competition will lower marketing costs and improve efficiency.
- Listen to customers: A winning business tactic in a recession is to nurture your loyal client base. Focusing resource and marketing efforts on servicing existing clients can offer more results with far less effort and expense than it takes to acquire new clients.
- Agile adaptation: Economic challenges mean customers may now need to engage with your business differently. So, look for ways to adapt and improve the customer experience like a loyalty program or more flexible payment options.
- Embrace creativity: When standard behavior changes, perhaps one of the most overlooked areas to focus on is brand standout through creativity. Putting a spotlight on real people (business workers and customers) through rich and creative filmic content is one way to deliver uniquely personalized messaging that can be cut many ways and shared across multiple platforms.
“History has repeatedly shown us that recessions can offer opportunities for growth for businesses that sustain and adapt their marketing activities and budgets,” la Cour said. “As the saying goes, “When times are good, you should advertise; when times are bad, you must advertise.”
Cost Control and Quality
As both the CEO and the CMO of Stern Brands, Inc., the parent company of Trinetics Group, Sara Stern has more than one hat in the ring when it comes to her company’s success. To establish her priorities, the question she asks is — “Is this helping the organization make money?”
As a manufacturing firm that markets exclusively to other businesses in the aerospace, automotive, defense, electronics, filtration, medical and general consumer products industries, Stern said most of the time companies come to her looking for a better solution.
“We use organic website SEO and SEM and are currently producing a video to help companies see what we can do for them,” Stern said. “We are also in the process of creating an e-Book to be downloaded. This will capture prospects for us to remarket our unique services to followed up by an automated drip email campaign. Then we wait for the quote requests to come in via our website.”
Her biggest priorities at the moment are cost control and quality. Stern said the biggest priority of any business right now is controlling costs and she believes there are three areas to scrutinize:
- Where are we are currently allocating our dollars?
- What are we are approving for new purchases?
- What are the inflationary effects are on future purchases?
“This is really the first step in looking at where you can make pivotal cost control decisions and where your priorities are as an organization,” she said.
As for quality, Stern said they are improving and automating product lines to help reduce rework and improve profitability.
“This is also important because with our shared values and organizational KPIs, we hold the entire team accountable for quality,” Stern said. “We believe quality is a team sport and every one of our employees has a responsibility to meet and exceed our customers’ expectations. When we deliver a quality product at a fair price, we earn customer retention, and potentially new business down the road after the recession is over.”