Marketing through a Recession

The debate is over – we are facing up to flat sales, a global downturn and even the prospects of a full-blown recession. With the media pumping out gloomy (and wildly differing) recovery timescales, businesses everywhere are quickly preparing for the inevitable rounds of cost-cutting.

And as the Board settles in for a rough ride, one of the first budgets to be hit is good old Marketing. On the face of it, this may sound like common sense - after all, if no-one is buying, why spend money promoting to an unresponsive audience? But while ‘recession’ and ‘marketing’ are never going to be the best of bedfellows, any marketer who has lived through previous downturns will proffer an alternative view, suggesting that ‘battening down the hatches’ may not be the best tactic for interim survival before the eventual return to growth.

This safe, tried-and-tested strategy aims to ride it out, suffering lower sales but achieving cost-cutting to suit. Now, this may appease the finance guys and shareholders but it does little for long-term recovery in what will, by then, be a very hungry and competitive marketplace.

If you ‘freeze’ your scheduled marketing plans till everyone has agreed the bad times are over, you may find yourself playing an expensive game of catch-up. In other words, don’t be surprised if your more savvy competitors have been working on your best clients during the ‘downtime’, chipping away at relationships you have built over many years.

Now let’s consider an alternative, which still accepts the need for managing costs but chooses to concentrate on continued smarter marketing to maintain the company’s profile while riding out the storm.

With tough times ahead, the temptation is to cancel every ad campaign, product launch and roadshow, while doing the minimum of PR – after all, who wants to admit to yet another bad sales quarter? The good news is that this will probably be the tactic employed by most of your competitors.

But let’s consider an alternative view, one where your team re-shape their efforts around fewer objectives.

First off, a re-worked marketing plan should recognise that a downturn has a finite lifespan – while it could go on for some time, eventually it will be followed by a fragile recovery, but a recovery nevertheless. This should be built into the plan, training and activity management.

Preparing the plan of action

Here are few examples of a focused use of your marketing effort:

-         Firstly, make sure your staff are up to speed with enforced changes to product development, promotions and so on. Your clients will look to their account manager or support engineer for information so keeping everyone prepared with the answers can only help the relationship during difficult times.

-         Work with your existing customers to understand their changing needs, while informing them of your plans. It’s better they hear that a product’s development is stalled first-hand than be left in the dark.

-         Next, consider those prospects who, before the downturn, were close to reaching a deal. Keeping them aware of updates relevant to their project may help them work their schedules around your own plans, becoming a low-key beta site while things are quiet, for example.

-         Don’t neglect the more casual contacts – maybe longer-term enquirers – who can be kept aware of your company’s opinions on trends, future technologies and your strategies to meet these developments.

-         A common aim throughout is a balanced relationship with your audience – after all, an honest appraisal of the situation is likely to be far better received than either no communication or messages that are unrealistically up-beat.

-         If you use external agencies for event management or PR, consider bringing some of the more basic projects in-house. Besides reducing costs, this also helps build your team’s skills and their understanding of how to manage the agency in the future.

The first signs of spring

At some point we will finally start to see the first signs of recovery (OK, more likely government stats showing some degree of stability). All your efforts working with your clients mean they have trusted you to track any market or technology changes on their behalf – positive or negative – and, when the commercial climate suits, will be ready to work with you. By preparing for this phase, we will have prepared our ‘recession exit strategy’ with each individual client and can commit resources to their previously shelved projects.

The result is a managed marketing slowdown in conjunction with your clients, eventually leading on to a jointly defined schedule for a return to ‘business as usual’. And all for a reduced marketing spend combined with a collaborative approach to client management.