08 Feb, 2023
How to maximise your marketing ROI in a recession.
The dreaded R-word is forcing businesses to re-evaluate priorities and cut costs. But provided you spend smart, continuing to invest in your brand during a downturn is a key growth driver. Here’s why.
With most economists forecasting a recession this year, we’re already seeing consumers reining in their spending habits. And as businesses begin to feel the effects, marketers are under more pressure than ever to defend the value of their investments. But while it’s tempting to slash budgets and prioritise sales over brand building as a short term fix, going dark now will only jeopardise performance in the long run.
“Going into 2023, we recommend brands move from short-termism and focus on building better value and trust in the brand to achieve long-term impact,” says Abhinav Maheshwari, vice president of marketing effectiveness at Nielsen.
Continuing to invest in your brand during a downturn is absolutely one of the best ways to mitigate business risk and emerge stronger on the other side, commercially speaking. Brands that keep in tune with their customers' needs, retain (at least some) marketing budget, and stay ready to pivot in response to shifting demand are the ones most likely to flourish.
As a modern customer experience studio, Flight partners with our clients across strategy, consulting, communications, brand design and tech to create ‘ideas that work harder’. We chose this proposition because we innately understand the need for marketing investment to drive growth, and we know how to transform the customer’s experience to help get those results.
With that said, here’s our take on some practical ways to maximise your marketing ROI when times get tough.
Promote the value of what you’re selling
Value-based advertising is always a strong strategy, but even more so in an economic downturn. With less money to spend, price sensitive customers will align with brands who are able to offer value for money. Cut through the noise and resonate on an emotional or personal level with your ideal customer in your marketing, and you’ start to see increased ROAS (return on ad spend).
Concentrate on loyal customers
We all know it’s far more cost effective to retain a customer than to acquire a new one, making loyal customers one of the most important assets to any business. During tough economic times consumers will look for ways to save, making them more likely to switch brands. Defend your best customers against churn with quality customer service and a retention strategy that is built around rewarding their loyalty.
Prioritise the customer experience
You’ll never go wrong focusing on your customers, and nurturing your customer experience is non-negotiable in 2023. Map out your current customer journey from start to finish and find ways to remove friction and resonate with your customers. Consider stepping through the process as a new customer, asking for feedback through online surveys, reviewing your churn rate, and integrating your online and offline experiences (by offering click and collect for example).
Optimise your ad spend
Investing in media during a recession can actually save your brand money, as competitors pull back and lower media costs. Instead of slashing your budget, make micro-adjustments to optimise your media mix and performance. Consider reducing or cutting channels with minimal impact on ROI, shifting from awareness to more focused engagement campaigns, and targeting your brand's warm audiences through retargeting and lists.
Measure effectiveness, but not too much
Measuring marketing effectiveness can be tricky and time-consuming, we know. To stay efficient, it’s important to hone in on a few key metrics that make a tangible difference to your business. Once you’ve got these key data points, really focus your resources on lifting those.
To sum up, a recession presents a unique set of challenges for businesses, but smart marketers can take advantage of it to maximise ROI. Investing in your brand during a downturn may seem counter-intuitive, but it is a key growth driver that will pay off in the long run. By focusing on promoting the value of your products and services, retaining your loyal customers, optimising the customer experience, and making micro-adjustments to your ad spend, you can mitigate business risk and emerge stronger on the other side.
Get in touch for a chat about how we could help grow your business by transforming the way you connect with your most valuable asset - your customer. We’d love to hear from you.