Although the UK narrowly avoided a recession in 2022, we cannot afford to relax. The inflation rate is still high and the Bank of England has predicted that we will enter a recession later this year. Trying to run a successful business during recessionary times is not an easy task. You have to make some tough decisions. So, how important is digital marketing during a recession and what can you do to make your business recession-proof?
Speak to our digital marketing team.
How do we know we’re heading for a recession?
Here are some warning signs to look out for:
- A sudden increase in unemployment – Employers, usually in a big corporate setting, will look at staff cutbacks as a quick way to save money. This is also a good indicator of how successful the business is and how good (or otherwise) the profits are.
- A drop in personal income – A sudden drop in personal income will lead to people not spending as much to afford essentials. Less spending leads to a less healthy economy.
- The slowing of manufacturing activity – If manufacturing activity slows down, this is an indicator of reduced demand for the product. This reduced demand is due to people not buying the products which can be simply due to the fact they don’t have the money to spend.
- Increase in product prices – Inflation is a common indicator of a recession.
During a recession, which industries are hit the hardest?
Recessions are hard, there is no way around it. They affect all areas of life, and unfortunately they cross over – from the companies we own, we work for and companies we do work with, down to what we do in our free time. But where are the main areas and how do they affect us?
Unfortunately, some industries get hit harder by a recession than others. Sectors such as retail, restaurants, hospitality, travel and tourism become affected mainly due to the fact that they’re hugely reliant on consumers spending their money on non-necessities like a holiday, a nice meal or a new dress. They’re considered more of a luxury and are usually the first thing people cut back on when they’re trying to reduce their spending.
Other industries affected include luxury purchases such as personal trainers, high end retail and non-essential consumables, such as the coffee you get on your commute, the sandwich you buy at lunchtime and the after-work drinks. Again, this is mainly down to the consumer considering them non-essential purchases, making them first up to the chopping block. You can go without a personal trainer for the foreseeable future but you can’t go without heating during the winter, for example.
If you own a business, you will feel the pinch quite quickly. Not only are people not spending, overheads are increasing and wages are being driven up by an increased cost of living. This in turn will force businesses to increase their prices, or get clever with their marketing efforts in order to get consumer confidence up.
When the economy is down, why is digital marketing even more crucial?
During a recession, people feel the need to adapt and their habits naturally shift into different directions in order to cope. For many this would mean downsizing or cutting back on spending wherever possible. We just need to think back to the 2020 Pandemic. How many of us in those early lockdown weeks actually had more money due to no commuting costs, no social spending and not being able to get to the hairdressers? Great for the individual, but not so much for the businesses that were getting no customers.
Quite often the first spending in a business to take a hit is in marketing. Let’s face it, it’s unlikely to have an immediate return on investment, right? All those hours spent on SEO, tirelessly posting on social media channels and creating reels doesn’t appear to be directly putting money in the bank and paying your staff. But it is having more of an effect than you think. In fact, removing all digital marketing strategies during a recession is actually detrimental, you just need to be more strategic and think differently.
Whilst customers absolutely make purchases based on their confidence in your business, it’s also hugely important that they have trust. Trust that your business is reliable, is here to stay, and trust that you will be able to deliver what is expected. If you saw that a business was clearly struggling and all advertising had ground to a halt, you may be more concerned about investing in their products due to fears that customer service might not be as good, and product quality potentially being sacrificed in order to help them stay afloat. Therefore trust in the business as a whole is diminished. And once you’ve lost the trust of your customers, it’s incredibly difficult to get it back, which means holding onto it in the first place, should be of great importance to you.
Finally, there is the fact that, historically, recessions don’t last forever. Calling quits on all your digital marketing efforts during a difficult financial period may seem like the quickest and easiest way to reduce costs at the time, but it’s imperative in the business world that you don’t limit your thinking to the short-term. Once the recession does ease, you’ll have to go through the process of setting up all your digital marketing strategies, and building up a new audience virtually from scratch all over again. A task that will consume both your time and a chunk of your budget. Had you decided not to stop your digital marketing efforts during the recession, this task would not be necessary. It’s worth noting, however, that a good digital marketing agency will be able to take this off your hands for you, allowing you to use your time where it’s best needed.
When the economy is down, what’s the best way to promote your business?
Online marketing has come a long way since the last recession, it’s matured and proven itself to be completely valid within the marketing industry. Therefore efforts and strategies that were perhaps deemed unnecessary during the last recession are now recommended or even essential.
Depending on your industry, online marketing is typically much more cost effective than offline efforts whilst still making a huge impact to your business’s visibility. A lot of consumers are now accustomed to buying online, and so having a digital marketing strategy with clear objectives makes a lot of sense.
Online strategies have the advantage of being undertaken much more quickly than offline strategies whilst still being effective and budget friendly. There is also much more versatility and flexibility with an online campaign. You have the ability to simply “turn off” any ads you’ve got running if they appear to not be working for you. However we do recommend that you consult with an ads expert before making any final decisions, as it could potentially affect your overall strategy or online performance.
Five strategies for keeping your business afloat during a recession
The concept of laser targeting in marketing, put simply, is when you focus your marketing content on a very specific market with the goal in mind of curating content tailored to that market. This is best done using data driven analysis through an analytics tool, like Google Analytics. If you know your target market, marketing online is considered much more effective and budget friendly than offline. Yes, you can leave a well-placed leaflet on a supermarket notice board, but think how many supermarkets you would have to visit to ensure that lots of people see it, all to see even minimal results and little to no return on investment. This is before you take into consideration the costs of printing and the man hours spent distributing the leaflet. Instead, you can spend your valuable time and precious budget on a great Social Media ad that will be seen by hundreds if not thousands of people, you can also specify your target audience – something that’s impossible to do on a supermarket notice board, or even by spending advertising revenue on a billboard campaign.
How many people do you know who don’t own a smartphone? We live in a world where not only do most people have a smartphone in their pockets at all times, but who also expect, and demand, immediate access to the internet. Therefore having your businesses website optimised for mobiles, is essential to the success of your business’s online performance. Consider how you would react if you used your phone to access a website and it wasn’t properly optimised for mobile use. Would you spend time still trying to work out how to make the website work for you, or would you simply go back to the search results and find a better website? How you would react is most likely how your customers will also respond.
Most good websites are optimised for mobile first and this is actually top of the list from Google. So it’s vital to ensure your website is optimised both for desktop and mobile use.
SEO (Search Engine Optimisation)
In order to be the best recession-proof business, you cannot abandon SEO. The advantages to a strong SEO strategy are seemingly endless. It will assist in the improvement of your website, help you reach new and returning customers and ultimately, when done well, lead to a higher conversion rate as well as ranking higher on Google’s search result page. Attracting customers through organic SEO, keeping them and having them convert with you is a fantastic result to obtain, especially during a recession.
SEO’s ultimate goal is to increase your business’s visibility and searchability, which in turn drives traffic to your website and increases your brand awareness. These are aspects that prove invaluable during a recession. Consider getting an SEO audit done on your website to see which areas could be improved on to enhance your overall performance.
Make sure to focus some time on Local SEO as well. Many people like the convenience of shopping or doing business locally, as well as supporting the local economy.
The last thing you want as a business is to disappear off the map or for your business to appear to be struggling, so keeping your brand visible is crucial to your business. Present your brand as a confident business, and your customers will feel more confident buying from you.
Social Media is a great way of “keeping up appearances” for your business and you can do things that really showcase your business that don’t cost you much (or anything) at all:
- Create case studies, customer reviews or testimonials (or update the ones you have) and post these on social media (make sure to spread these out over time). This will increase consumer confidence and give social proof that engenders trust.
- Take pictures of your team, social events and business events they attend. Tag the people involved which will encourage them to share on social channels. A happy and engaged team is a great way to showcase how great your business is doing
Cutting back on these key elements can be detrimental to your business.
A tried and tested marketing method. There are endless benefits to offering your customers discounts or a little something extra for shopping for you. It can help attract new customers, drive traffic to your website, re-engage existing customers, boost your reputation, build loyalty and meet sales targets. You’ll see businesses in most industries utilise this strategy on pay day, for example. They know that on the first day of the month more frivolous spending will take place, so sending an existing customer a discount code, relating to a ‘pay day treat’ will influence the customer to spend with you where they perhaps wouldn’t have without the code.
Some think that discounts will ultimately mean less income. However if the customer wasn’t going to buy anything until they saw they could save some money, offering a cheaper product that results in an impulse buy is still a better outcome than not selling anything at all.
Therefore, cutting your marketing budget during a recession is not necessarily the best move you could make. You want your business to appear strong, resilient and a valuable part of the conversation. Halting any actions that are keeping your business visible may seem like a quick and easy method to save money, but in the long term it will produce various issues that will cost you time and money to resolve. Therefore, in order to have a recession-proof business, your digital marketing must not be ignored.
If you require any assistance with your digital marketing, get in contact with Cariad to see how we can make a big difference to your business and get you hitting those all important targets.