Direct Marketing Delivers Results, Even During a Recession
While none of us want to hear it, recession talk has started to heat up to the point that it can’t be ignored any longer. Brands are already starting to cut budgets back as the inevitable approaches, and marketing budgets are almost always the first to be swindled away. Instead of encompassing a full multi-channel strategy, companies tend to focus on those channels that are virtually guaranteed to have high ROI.
This might seem like a sound plan when financial struggles are over the horizon, but cutting your marketing budget might become your biggest detriment to staying afloat.
Why You Shouldn’t Cut Your Marketing Budget
If we look back at previous recessions, such as in 2008 when General Mills decided to promote the value of eating at home leading to increased sales across all product categories compared to when the economy was stable, we see the benefits of continual spending. During a separate recession in 1991, McDonald’s decided to decrease their marketing budget which led to a 28% decline in sales. Taco Bell and Pizza Hut didn’t cut their budgets which allowed them to take advantage of McDonald’s decision leading to increases in sales of 40% and 61% respectively.
These results aren’t limited to large companies either. A study of 3,900 companies worldwide found that businesses that maintained their marketing budgets during the 2008 recession saw a 17% rise in growth. Recessions are certainly challenges, but they can also be opportunities with the right approach.
Marketing Strategy During a Recession
It’s Important not to panic when the economy dips, as you’ll likely compound the financial situation and suffer from its impact. A recession presents a perfect time to create campaigns centered around the sensitivity consumers will have with their wallets. You want to stay genuine, sympathetic, and thankful to your customers while you consider which KPIs you will focus on to measure marketing success.
While you shouldn’t cut your marketing budget, you should create new goals. Instead of focusing on pure sales, focus on awareness and generating leads when bringing in new business. For your current customer base, prioritize customer loyalty programs through direct mail campaigns. Re-engagement campaigns also are a great way to show customers you offer great value, even during bad times.
You must be recession aware, meaning your content and offers need to be geared towards less financial commitments. You may not see the profit margins you used to, but a profit non the less.
You as a business manager, operator, or marketer are also trying to make every dollar count during an economic downturn. Growing in increments is vital to surviving a recession. Instead of thinking about quick conversions to generate additional sales, dive into tactics that create growth over time for your brand such as nurturing your customer base.
Customer loyalty programs through direct mail campaigns are a cost-effective long-term nurturing system for your customer base that keeps them engaged and you top of mind. You can’t control the overall economy, but you can control who your target market is, how you assemble your mailing lists, and the elements you put into your campaigns.
Target Your Audience
The biggest asset of any marketing campaign is the target audience that is selected. Your chances of success hinge on your audiences’ already present interests. Identifying the traits of who your product is meant for would-be exceptionally wise during a recession when consumers are holding onto their wallets with a tight grip. Prioritize data quality as accuracy is key to minimizing waste and leveraging the first-party data you already have in addition to third-party data.
Aside from the basic demographics, psychographics, and geographics of an audience, identify characteristics such as purchasing behavior, brand sentiment, and stages of your sales funnel your audience may be at to better focus your targeting. After considering the first-party data you have, build out a list with combined third-party data to create your ideal target audience.