As a recession looms, the government will this week launch a campaign encouraging businesses to divert marketing spend into cutting prices to help mitigate the cost of living crisis.
The taxpayer-funded campaign will seek to “amplify and channel” the efforts of brands to curb rising costs, encouraging other companies to follow suit.
We believe this advice should be taken with a pinch of salt, especially in the financial industry. Let us explain why…
Why is marketing during a recession so important?
Marketing in recessions can be a great advantage for your company and help you to grow your brand faster than in a stable financial environment. Well, that is what history has shown.
While some businesses are quick to reduce their marketing budget in a recession, justified by the argument that prospects have less money to spend, it could be an opportunity missed.
Your brand’s long-term health will be affected if you reduce your marketing efforts, regardless of economic conditions.
We believe it is important to continue marketing even in times of financial hardship, instead, be clever with how you do it.
Marketing is your link to clients and prospects. You should expect a drop in sales if you don’t have communication in place.
Especially if your competitors continue their marketing efforts, pulling prospects their way.
You can increase your conversion rates by keeping your marketing budget steady, or even seeing room for opportunity and increasing it, if you can.
Why is recession marketing often more successful?
This is due to a few reasons.
Firstly, there will be less competition for prime spots in advertising, as other financial brands cut budgets or stop advertising altogether.
This ultimately means you will be able to get more exposure for less advertising spend.
Secondly, there is less investment into innovation during a recession. This means it can be a great time to launch a new service or even a new financial brand.
In the last recession, Jeff Bezos, the owner of Amazon, announced to his shareholders that their business had grown by 68% annually.
Why? They didn’t stop marketing.
In fact, they introduced new products to the market and went full force on marketing.
In a recession, there are always opportunities for success, regardless of how big your business is.
Marketing during recession: What should you do?
As clients’ income decreases you need to shift your marketing to meet their new needs.
Here are some techniques that will help you adapt to the unique conditions of a recession, without compromising your marketing quality:
1. Your online presence
Make sure your online profiles communicate to prospects and clients that you are here for them in these uncertain times.
Focus on building trustworthiness and showing empathy through all online communications.
3. Your budget allocation
No matter how your advertising and marketing budget changes during recessions, it is possible to adjust where the money is spent.
You should pay attention to the channels that are doing well, and reallocate funds accordingly.
Remember, if competitors decrease advertising spend, or stop advertising altogether, this could open up a window of opportunity to advertise in top positions, for less.
4. Your tone
Recessions can cause high emotions, especially when discussing finances.
The financial industry will see a shift in attitudes over the coming months as people prepare for the recession on the horizon.
You may need to adjust your tone to ensure your clients feel understood.
While you can communicate the same brand messaging and core value, you should do an audit to ensure that anything insensitive has been removed from all channels.
5. Your Key Performance Indicators
Marketing analytics and key performance indicators (KPIs) can help you identify which campaigns produce the best results, and which ones are not.
This will also allow you to prioritise strategies that generate income or leads, and then scrap those that don’t. This will not only help you save money, but also drive sales.
You may need to adjust your marketing goals and KPIs in the event of a recession – which is sensible – but also keep your door open to opportunities that it can also provide.
6. Targeting your clients
You want to target the right audience with your advertising and marketing.
Laser-focused targeting is essential for survival during economic downturns.
This is especially true if your marketing budget is limited, as it avoids spending on clicks irrelevant to your ad.
It may be necessary to adjust your targeting to ensure you focus on a specific niche in your audience.
Find out what your clients want, and adjust your targeting accordingly.
Now is a good time to really consider what is working, and what is not.
7. Test your ads
You should test like you’ve never tested before. You should test different ad copy, buttons copy and colours, keywords targeted ad positions, channels and other marketing and advertising assets.
A/B testing can be used to fine-tune your ads on social media, Google and Bing, as well as identify high-converting keywords that will optimise your website.
What does recession marketing look like for financial brands?
Despite the dire outlook, a recession offers finance content marketers the opportunity to show courage, empathy and leadership, all informed by reality, at a time when customers are experiencing uncertainty, stress and anguish.
Recession reminds us that finance and content marketing have one primary purpose: education.
As a financial brand in the current climate, you need to show empathy with thoughtful, broad-thinking content. Think about how you can add value to your audience – building on rapport and trust.
Uncertainty caused by recessions can have severe consequences for the mental health of your clients, whether they’ve experienced financial losses or are trying to cope with fear of it.
It is important to show empathy and provide comfort through financial content, your outbound marketing and overall communications.
Before you think about slashing your marketing budgets with a recession on the horizon, remember that marketing during a recession could be vital for your financial company’s success or even survival.
It can even lead to greater growth than what you might get in a favourable financial environment.
We are here to answer any questions you may have about how to market in a recession, or to provide additional tips and tricks to support your next campaign.
