Businesses have plenty of options when it comes to advertising and marketing. Businesses can go with traditional advertising such as radio or television, offline marketing, or offline advertising options. When the economy is booming, it’s a no-brainer that businesses should invest at least some of their resources in marketing. But how should business owners deal with advertising when the recession hits?
Fears of a recession often start spreading every few years even though recessions only happen every 6 years or so. from Recessions tend to have a big impact on business, entrepreneurs and business owners should never take recession lightly. In this article, we’ll look at how businesses should deal with advertising during a recession.
Should you advertise during a recession?
Running a business during an economic downturn can seem like a game of chance. Some companies survive low points intact, while others collapse, which seems entirely unexpected. Fortunately, it doesn’t. When an economic downturn hits, your business is not “doomed” to fail. Instead, Your business can thrive even in tough times. And one of the best methods available to make this happen is through the use of consistent advertising.
Business owners often make the mistake of treating advertising and marketing expenses as discretionary expenses. This line of thinking often reduces costs to the department whose performance actually matters most. Advertising allows you to connect and engage with your target audience by providing brand visibility for your company. In a recession, when other companies limit marketing budgets, you can take advantage of the spotlight left behind. Advertising can not only help you survive but also help you grow Sales during recessions.
Target your best customers
It seems obvious that keeping customers happy is an important aspect of running a business – but many small businesses fall short and fail to establish returning customers. Repeat customers who return after a great experience are the backbone of your revenue during economic hardship.
Acquiring new customers is essential, but fewer consumers are willing to spend during a downturn. So, this time, your focus should be on customer retention instead. The average success rate of a sale 60-70% of existing customers, while the probability of acquiring a new one is only 5-20%. That’s a staggering difference, and it can be a game-changer. Long-term sales from repeat customers can help your business stay afloat during times of chaos.
Don’t skimp on your advertising budget
It may seem like a good call to cut spending on advertising as much as possible, but it’s a rookie mistake. If you can, you should continue to advertise during a recession, even if it seems counterintuitive.
During a recession, companies that choose to continue advertising typically see sales increase compared to their non-advertising counterparts. Here are two great examples of this principle.
McDonald’s vs. Taco Bell
In recession since 1990-91, McDonald’s made significant cuts to its advertising and marketing budget in response to the struggling market. Taco Bell took advantage of this opportunity and continued to advertise it. As a result, Taco Bell’s sales increased by 40% and McDonald’s sales decreased by 28%.
Post v. Kellogg’s
During the Great Depression In the 1920s, the breakfast cereal company Post significantly cut its advertising budget. On the other hand, its competitor, Kellogg’s, doubled its advertising budget and introduced a new product – the Rice Krispies we all know and love. Due to their creative, adaptable marketing strategies, Kellogg quickly surpassed the success of the Post and remained the leader in their industry.
Use low-cost advertising
Just because you’re not cutting back on your ad budget doesn’t mean those ads have to be expensive Using low-cost advertising methods can save you money while still being effective. Here are some tricks that are easy on your budget:
- Social media content
- Giveaways and Sweepstakes
- Referral program
- Loyalty incentive/reward program
- Branded merchandise
- Video content (like webinars)
- Blog content
Creating online content can build customers quickly, especially if you use SEO. SEO stands for “search engine optimization,” which uses keywords to prioritize your site in algorithmic systems like Google. You can learn to make your company website SEO-friendly at no cost and it provides significant visibility through search engines.
Other companies will likely shy away from handing out free products, vouchers and discounts during a recession for fear of failure, and consumers are penny-pinching at best. So when the market dips a bit it creates a great opportunity for you to grab the attention of struggling consumers. These promotional gifts may seem small, but they put your brand in front of your customers at a time when freebies look most appealing.
Focus on the long term
During a recession, you may be willing to make small sacrifices to stay afloat. Lowering prices, for example, is a great way to attract the attention of customers who are struggling. Although it’s less immediate revenue, consumers will remember your post-recession brand as understandable and adaptable.
Some aspects of your business may suffer more than others. For example, during a recession, consumers are cutting back on overspending and cutting back on luxury purchases. If your business depends on the sale of such items, you need to create a backup plan when times get tough. Plan ahead Can save your business from failure.
Focusing on the long term is especially important if you run one type Businesses that perform poorly during recessions. For businesses like this, surviving the recession should be celebrated. If you’re in an industry that’s hit hardest by recessions, outlasting the recession will create amazing opportunities because your competitors are unlikely to survive.
what can you do
The most important thing to remember as a business owner during a recession is that the big picture counts. Highs and lows are a natural part of the modern economy, and you as a business owner are responsible for learning to navigate them Use your business’s sales history and profit margins as resources to gauge upcoming patterns Adaptability sets great companies apart and keeps them strong for decades.
Prepare your business for a recessionn It can help prevent disasters down the road before they happen. Sometimes it takes a lot of patience and resilience to get through a recession, but it never hurts to have a strategy. Even when the economy is improving, take the time to sit down and consult your business plan about unexpected events. It could save your company one day.
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