With the UK officially in recession, the current financial state of the UK raises many poignant questions surrounding marketing. Is it appropriate to keep marketing at this time? How can business owners ensure their money is well spent and what lessons can we learn from the last recession?
Business Matters speaks to Angela Podmore, founder and CEO of Kinetic Communications, about best practice for generating business in a recession and how businesses can do this sensitively.
How important is marketing at this time?
The decrease in demand in a recession brings greater contest to every business transaction.
That means it’s important to pedal harder on your ‘marketing machine’, so you have the momentum to pull yourself back up as we come out on the other side, into a new growth cycle. The steeper the decline, the harder you need to pedal to get up on the other side.
Smaller businesses often rely on word-of-mouth referrals and networking to get their message out there. Virtual networking has its limits and challenges, and it also lacks the power of face-to-face meetings. As such, it’s key your business maintains a strong online presence. It was important before, but it is even more crucial now.
How do you know if you’re spending your money well?
In a recession, budgets are tight, so spending wisely can be a make or break decision. Before committing to any large marketing spend, it’s important to test and measure to allow you to see what’s working and what’s not.
When painting a wall, you wouldn’t paint the whole thing before deciding whether you like the result. You would use a few paint samples first, and then decide on a colour to paint the whole wall. So, why commit to a large marketing spend before you know what shape you expect the end result to take?
For those who haven’t invested in marketing before, testing and measuring is absolutely vital to understand what works for you. What are your most effective methods of reaching your target audience and what marketing tools give you the best return on investment?
The majority of SMEs lack a clearly defined sales process. You need processes in place to measure all of the leading indicators tracking leads turning into prospects, customers and advocates. For example, this could include contacts completing a ‘contact me’ form, sending a proposal or quote or arranging a free site survey.
Many analytics tools are entirely free and easy to use. Google Analytics, for example, allows you to see where website visitors are coming from and monitors ‘conversions’, helping you to clearly identify the sources of your sales leads.
Too few SMEs have a conversion goal set up in Google Analytics.
What lessons did we learn from the 2008 recession that can help us now?
COVID-19 has caused the first global recession in living memory – the whole world is in economic turmoil. No matter how seasoned you are as a leader, we’re all in unchartered waters.
Today we use the term ‘pivot’ to describe how businesses create new solutions to solve new customer problems, but businesses did that during the Great Depression. This time is different because the internet brings another dimension to what’s possible.
Top things to keep in mind:
- Keep a close eye on your cash position – you can lose money every month, but you only run out of cash once.
- Know where you are at any one time – conduct regular reviews of your current market position to check you remain competitive.
- Know where you want to get to – set an overarching aim for your marketing activity and know how you’ll measure it.
- Allocate your resources – time and money – into several, smaller budget ‘bullets’ (see Jim Collins ‘Good to Great’) before you fire ‘cannonballs’.
- When you see what’s working – scale up your investment and allocate bigger budget ‘cannonballs’.
- Keep testing and measuring – understand what’s working and what’s not.
- Cost-cutting has its limits – at some point, you have to speculate to accumulate. No business stands still. A company has to keep moving to survive. Trim budgets in ways which keep your marketing machine still functioning.
- Be optimistic – we’re all on a daring adventure. Recessions are loaded with opportunity and we need to make the most of them with kinetic strategies. ‘Creative destruction’ is what happens when one business dies and another rises in its place which is leaner, meaner, fitter.
How can you sensitively market your business amid a recession?
The most important thing is not to push COVID. Be sensitive to how many people are suffering life-changing, long-term effects as a result of the pandemic. Instead, identify where you can be useful and a friend to your customers.
Communicating successfully in a recession is all about helping. Stick to your specialist subject as you share content – words, pictures, video, infographics, webinars, whatever – which highlight how you’re in a position to help others. Being useful online creates a virtuous circle and fast breeder effect.
Think carefully and in detail about your ideal new business enquiry or target audience.
Will your content resonate with them and help them solve their problems? If not, refine your messages: what you want your targets to think, feel and believe about you. That’s when marketing and PR really come into their own.
Yes, we need to reference the current situation, but blatantly exploiting it for marketing gain is a short-cut to losing customers. The key is to be useful – don’t market for the sake of marketing. Position your company with a genuine way to resolve your audiences’ problems.
Where do you begin marketing in a recession?
Begin by finding out where you are at right now. Audit your assets. Then, think about where you want to be. Your plan links the two – defines the steps you need to take to get you from where you are now to where you want to be.
Stick to what you know. Bear in mind great risks carry heavy penalties if they don’t work out. Equally, now is a great time to sharpen your offer. Use the recession as an excuse to reboot your business and make it more relevant to today’s business world.
Once you know where you want to be, the most appropriate marketing tools for your business will become clear.
What are the three, key steps for marketing in a recession?
First, refresh your marketing plan, so your brand ‘DNA’ stands out across the world. Know what you stand for and have a clear, simple and memorable vision, mission and values, which run through every element of your communications plan.
The best communication plans orchestrate your activities with a clear set of objectives and target audience personas, which enable you to measure progress. Have a plan and work the plan.
Test and measure and continually polish your plan until you find your sweet spot – a regular flow of high quality leads which are easy to convert.
In summary: plan, test, measure and hone.
