The Current State of Affairs
Interest rates continue to rise, the war in Ukraine is impacting international trade, supply issues related to COVID-19 are still present and inflation is reaching staggering levels. Some organizations, like RBC, are predicting a short recession in 2023. Out of 17 major indicators, four indicate a possible recession in June 2022.
Far from being experienced economists or financial experts, we cannot predict the economic state of the coming months. However, what is clear is that we are currently experiencing major changes that most likely will have an impact on businesses.
Changes in Consumer Behaviors
A quick look at Google Trends will show just how worried people are about the upcoming recession.
We can therefore assume that consumer behaviour is changing. And, when going through periods of financial instability, people are more price sensitive and reduce their non-essential purchases. This behavior usually means less revenue for companies and they, in turn, cut back on spending and put their investment projects on hold.
As mentioned here, here, and here, marketing-related expenses are often the first to be impacted (unfortunately) when big economic changes hit, as it was the case in 2008 and in the early months of the COVID-19 crisis. While it’s good to be more cautious and mitigate risk, cutting your marketing budget drastically can be quite detrimental in the long run.
Companies often have the reflex to reduce their efforts on awareness campaigns and rely only on tactics focused on conversion. But beware, this idea is only viable for a short period of time. If you are no longer able to generate brand awareness and recognition, your performance marketing will be greatly affected.
It’s also highly likely that companies that continue to invest in marketing will be able to steal market share from their competitors who have reduced their investments.
How to Adapt Your Marketing During an Economic Crisis
Companies should strive for agility, flexibility and optimization. Here are some tips for optimizing your digital marketing to achieve more with less.
1. Build on a relationship of trust with your customers
When times are tough, consumers turn to companies they trust. Take this opportunity to communicate authentic, transparent and empathetic messages to strengthen your relationships.
Also, converting an existing customer is much cheaper than acquiring a new one. Remarketing or email marketing can help you keep in touch with your past customers and drive them to make another purchase. Highlight your competitive advantages to reinforce that your products or services are the best choice.
2. Maximize your marketing budget by cleaning up your campaigns
In times of financial crisis, it is even more important to reduce unnecessary spend on Google Ads, Facebook Ads and other advertising platforms. Here are a few ways of doing so:
- Be sure to track conversions on your website to make informed decisions.
- Review Search term reports and add negative keywords for irrelevant searches that are costing you money
- Check your display campaigns for low quality placements and underperforming audiences and exclude them
- Make sure your campaign structures and bid strategies match your goals
- Make sure you are leveraging ad extensions and have high quality Responsive Search Ads in your search campaigns, which will improve your Quality Score and lower your cost per click.
- Don’t forget to credit view-through conversions and assisted conversions to make sure you maintain the campaigns that are fuelling brand discovery
Despite Google’s increasing automation of campaign management, you should evaluate campaign performance frequently to better control how your budget is spent.
3. Focus on lower risk tactics
Marketers rely heavily on online advertising to reach their target audience. Still, there are other tactics available to them that are worth considering, especially in times of crisis. Here are two of them:
First, knowing that consumers are, more than ever, price sensitive, affiliate marketing may be a tactic to consider. In this way, you can share promotional codes that will encourage consumers to take action.
Plus, affiliate marketing allows you to pay a commission only when you generate a sale. This, in turn, allows you to forecast your cost per acquisition and make solid projections. To learn more about affiliate marketing, read our article here.
Second, email marketing is recognized as the digital tactic with the highest ROI. Take the time to review your strategy and make sure you have the essentials:
- An automated welcome email
- An automated post-purchase email
- An automated email for cart abandonment
For best results, send occasional emails to stay “top of mind”. Here are some email ideas: promotions, discount codes, best sellers, new launches, educational content, etc.
4. Surround yourself with the best partners
The importance of being well surrounded in times of crisis cannot be overstated. Outsourcing your digital marketing to a digital agency can be a temporary or permanent solution to lighten your in-house workload and allow you to focus on other aspects of your business.
Bloom can help you navigate the difficult times ahead. Fill out this form and we will contact you shortly to discuss your digital marketing needs.
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ABOUT THE AUTHOR
Marie-Joelle works at Bloom, a digital marketing agency, as the Director of Marketing. She's passionate about digital marketing tactics (from social media to web design) for B2B businesses looking to grow online.