Why You Shouldn’t Cut Back on Marketing in a Recession
Should you cut back on marketing in a recession?
In a word: no.
Despite mixed economic signals, it looks like odds of a recession this year are pretty high.
But even if we don’t hit an honest-to-god recession, there’s no doubt that we’re living through uncertain times. The layoffs in the tech sector are just one sign that companies are tightening their belts.
After nearly a decade in marketing, I’ve noticed that in many companies, marketing is the last to be hired, first to be fired.
This is a mistake.
I was working full-time for a tech startup in 2020 when the COVID-19 pandemic hit. Although many companies were letting their staff go, our CEO decided to spend more on marketing and sales.
12 months later, we had not only doubled our marketing-sourced revenue, but we successfully exited.
The lesson has stuck with me: don’t cut back on marketing in a recession.
Instead, a downturn is the perfect time to double down on marketing. Here’s why—and how to do it well.
Why invest in marketing in the first place?
Before getting into the nitty-gritty of marketing in a recession, let’s zoom out and ask a more fundamental question: why do companies invest in marketing in the first place?
Believe it or not, the answer isn’t obvious to everyone.
According to Reuters’s State of Marketing survey (2023), companies expect marketing to drive a number of business outcomes:
- Lead acquisition
- Online engagement
- Customer loyalty & retention
- Brand elevation & reputation
Source: Reuters
All of these KPIs boil down to one North Star: marketing is about getting (and keeping) business.
Whether you do that through demand gen, lead acquisition, brand building, social media audience growth, the end result is the same. We’re all here to make money.
This imperative doesn’t change when there’s a downturn or recession.
And in terms of alternatives, there really are only two: a sales team, and passive referrals.
Now don’t get me wrong, these are good options—I use both of them to grow my own agency. But they have some drawbacks:
- Referrals bring in highly qualified leads, but without active management it’s sporadic and unpredictable
- Salespeople are great at fostering one-to-one connections, but they don’t have the scalability that marketing does (especially when it comes to filling top of pipeline)
So while you should invest in sales and your product should be driving referrals, there’s no substitute for investing in marketing.
This is especially true when we’re in an economic downturn or recession.
Marketing in a recession: the key to surviving economic downturns?
I told a story earlier about how a company I worked for chose to double down on marketing in a recession, and saw incredible results down the line.
But I’m not the only one.
According to data from Analytic Partners, 60% of brands that increased marketing spend in the last recession saw greater ROI. Those who spent more on marketing saw a 17% increase in incremental sales.
The data lines up with common sense. Recessions mean that it’s harder to get new business. This solution is more marketing, not less.
Granted, there are hard limits on budgets. I get that. But for most companies (even small ones like mine):
- There are areas where we’re spending that aren’t delivering value
- We’re “spending on marketing” but aren’t focusing on tactics that drive leads
- We’ve got bad tools and team members who don’t know how to do more with less and deliver results
One example: investing in organic content vs. paid ads. With organic content, you invest once, and it pays off for years to come (including after the recession is over). With paid ads, they only work as long as you keep pouring money into them.
So it’s worth taking a hard look at where you’re investing in marketing and making adjustments.
But dialing back on marketing entirely? That’s a bad idea.
If you like leads and revenue, then you need to invest in marketing—even during a recession.
5 reasons to market in a recession
Now it’s time to get specific. Here are five specific reasons why marketing in a recession is not only necessary to survive, but a solid plan for future business growth.
1. Less competition
Simply put: if your competitors aren’t investing in marketing, the field is wide open.
As I mentioned earlier, many companies will dial back when times get tough. It stands to reason that your competitors will be among them.
So if you dial up your efforts, you may find more success—simply because the competition is thinner.
Marketing and sales are an uphill battle in the best of times, especially if you’re in a highly competitive market. If you’re going to have to fight an uphill battle anyway, you may as well do it when the field is more open.
2. Lower close rates = higher funnel volume
One of the key aspects of lean times in general is that close rates go down.
Prospects get nervous. People get anxious. And budget holders place an iron grip on the organization’s resources.
If you want to empower your sales team to meet quota, you’ve got to give them more lead volume.
Although there are certainly ways to make your sales team more efficient, increasing lead volume is much easier when you’re investing in marketing.
3. Grease the wheels
During recessions and economic downturns, objections run rampant. Many of these are likely not different from the objections you face during good times.
But when times are tough, people will find any excuse to say “no.”
If your salespeople are the only ones out there responding to objections, then they’re going to have a harder time changing minds and persuading people to buy.
Marketing, however, can help salespeople by “greasing the wheels.”
By raising and responding to key objections on your website, social media, email campaigns, etc., your marketing team can get prospects thinking about these responses before they even talk to a sales rep.
So when the reps start engaging prospects, the wheels are already turning. Which means they won’t have to work as hard to close the deal.
4. Brand visibility
One of the things that’s important to remember is that when the market is tight, you may not close as much business as you did before.
Even if you invest in more marketing, there’s still a chance that you won’t close those new leads quickly or at high dollar amounts.
But markets don’t stay tight forever. Eventually, things are going to turn around.
The answer is: when market conditions change in your favor, who are your prospects going to call? You or your competitors?
If you’ve been marketing to them during the tough times, keeping your brands and products top of mind, then you increase the odds of getting callbacks by a whole bunch.
5. Customer retention
Finally, it’s important to remember that the most cost effective marketing tactic is keeping your customers happy.
So investing in marketing during tough times isn’t just about getting new customers. It’s about keeping and engaging the customers you already have.
If you don’t take the time to continually remind them:
- Why do you provide value to them?
- What is the risk of them cutting off your services?
- How are you able to help them survive during difficult times?
Then they’re going to slip away. Remember: the default mindset during tough times is to cut, not invest.
So if you want an easier time when renewals come around, then market your current customers a top marketing priority.
Why content marketing is a good tactic for the oncoming recession
Digital marketing channels seem to be a dime a dozen these days. So why is content marketing the best option during these difficult times?
I alluded to this earlier, but let’s talk about this in more detail.
Pay once, value always
One of the biggest value adds of content marketing is this: you only pay for it once.
Whether you’re engaging an outside agency or working with someone internally, one of the great things about content marketing is that you can pay for it once—and it works for you in perpetuity.
With an ad, once you stop paying for that ad, that’s it. You don’t get any more value for it.
When times are tough, it’s important to invest in those channels that get you the most bang for your buck. Even if you don’t see the value during the recession, when conditions improve that content will continue working for you.
Build your reputation among ideal buyers
If people are predisposed to not buy (which you can expect during a recession), clever ad copy isn’t going to do much to move the needle.
But with content, you have the time and the space to respond to the more complex objections—the kind that you can’t fit into a 60-character headline.
What’s more, during hard times, people only work with the people they know in trust. Content marketing is a great way to give value away for free, which only goes to build trust and reputation.
Unlike many other marketing tactics, content marketing (when done right) is the one that reeks the least of desperation.
Cost-effective asset creation & distribution
Content creation is about generating the assets—the content itself. Content marketing is about distributing those assets as many places as possible.
This includes SEO and marketing to search engines. But it’s so much more than that:
- Social media
- Email campaigns
- Newsletters
- Sales enablement
- Content syndication
When you create content—and it’s good content that actually speaks to your customers’ needs—you can repurpose that in many different ways and get more mileage out of it.
Bottom line: what will your funnel look like when the storm passes?
Right now, a lot of companies are in the middle of a storm. Many more will be experiencing a storm sometime this year.
The question you need to ask yourself: what will your funnel look like when the storm passes?
If you invest in marketing during this recession, you’re going to have an impressive funnel when things lighten up and conditions improve.
But if you cut your marketing initiatives, you’ll find yourself completely dried up.
Seems like a no-brainer to me.
Want to double down on content marketing in 2023? Fearless can help you develop valuable, unique, and clear content to engage your prospects and customers. Get started here.
