The world, and Canada as part of it, is heading towards a looming recession in 2023. It is thus critical that organizations start adjusting to Recession Marketing. As seen in previous slowdowns, companies will slash marketing budgets, terminate employees and hold off on new demand creation activities. An important question comes to mind: Do businesses need to acquire new clients in times of recession?
Well, if you are not convinced yet that the answer is YES, let’s review the consequences of cutting back on marketing expenditures during times of recession.
A comparison of the Bank of Canada’s inflation target and the current core and headline inflation rates. (The Conversation)
Based on previous downturns (the 2020 pandemic, the 2008 recession and the Great Depression), history has shown that marketing cuts result in inevitable long-term consequences:
Not persuaded yet? Let’s take you all the way back to the times of The Great Recession of the late 1920s. Two early-stage cereal companies introduced a ready-to-eat cereal product, competing with a well-established oatmeal company. The Great Recession came, and what did these companies do? One decided to cut back on advertising expenses to decrease their overall expenditure. The other company did the most unpredictable thing! It doubled their advertising budget and increased investments to push their brand to the world. That second company turned out to be Kellogg’s, the world’s leading cereal brand today. Their aggressive marketing efforts and tenacity in pushing their brand awareness to the general public during a recession time raised their profits to an unimaginable level. The other company that restrained its marketing investment was Post.
Kellogg’s recession marketing strategy vs. Post cuts strategy
OK, we know what you’re thinking: this example is from the food industry and a business-consumer (B2C) vendor. Then, can you please guess how a relatively small B2B software company (Salesforce), reached its first one billion US dollars in annual revenue by the 2009 fiscal year (despite the 2008 recession) and became today’s world’s largest enterprise software firm? Yes, you got it right.
So, what can your company do to achieve greater heights in the face of a recession? Based on a study from the Harvard Business Review (HBR), there are four marketing strategies concluded from the Great Depression and the 2008 economic crisis that can still be applied today:
Marketing activities are no longer a luxury. The combination of all marketing efforts raise your share of voice, creates prospective client opportunities, enhances client experience, and increases good word of mouth. Coupled with excellent customer service and overall product/service improvements, organizations can follow recession marketing guidelines and survive the turmoil ahead.
If you are looking for guidelines, support or specific assistance, please do not hesitate to contact us and to speak to one of our experts.
“Ranking our Web site high on search engines results, designing a professional Web site look and developing engaging relevant content for a heavy technology company like us resulted in a dramatic increase in client leads that we receive from our Web site.”Simon Robin CEO, Hardent