2022 was a difficult year for both households and businesses. To survive the economic quagmire precipitated by the COVID-19 pandemic and the Russia-Ukraine war, businesses all over the had to implement austere financial measures to stay afloat. Those who didn’t or couldn’t were ruthlessly defenestrated from the market.
Consumers prioritise purchases and cut back on spending during a recession, businesses sell fewer products and services, and advertising budgets are cut, which reduces marketing efforts. Even though it seems counterintuitive, reducing your marketing efforts in 2023 to save money will most likely be disastrous for your growing business, and you might even find yourself out of business by the end of the year. Implementing recession-prone and resilient strategies would be the best course of action because they will help your company weather the storm and come out stronger after the economic crisis has passed.
HENRY FORD “A man who stops advertising to save money is like a man who stops a clock to save time.”
Kim (1992), Werner (1991), and Quelch (2008) investigated the impact of economic crisis-related changes in promotional strategies and concluded that when firms cut advertising budgets during a downturn, their performance suffers during and after the recession. However, increasing or maintaining pre-crisis advertising levels increases sales income and market share during and after a recession (Notta & Vslachvei, 2015).
As much as I would love to be the bearer of the good news of a blossoming global and local economy in 2023, economists around the world, including notable analysts at Wells Fargo & Co., Deutsche Bank AG, and Bloomberg Economics, all predict a global recession in mid-2023 to 2024, with a three-in-four probability. We are not out of the woods yet.
Adopt the following fail-proof marketing strategies in 2023 for a prosperous business year to successfully navigate the increasingly complicated and troubled business seas;
- EMBRACE COMPASSIONATE MARKETING
Customers are experiencing high levels of financial and emotional stress at the moment, as the economic challenges and uncertainties are expected to continue well into 2023 and beyond. Many businesses are struggling too, however, no matter how tempting it may be, this is not the time for aggressive marketing but compassionate marketing. Compassionate marketing emphasises the values that help customers trust your brand, such as caring about their well-being, listening to their needs, and allowing them to spend responsibly. More than ever, customers want sympathy, generosity, and genuine connection. Make certain that your brand messaging reflects these values.
“Compassionate marketing is needed to prioritise brand trust over transactions.” THIBAUD CLÉMENT
Marketing’s goal is to build long-term relationships with customers rather than to extract as much money as possible from them in the short term. Avoid promotions that encourage customers to spend more than they planned, such as “buy three, get one free” or “20% off your next purchase and 50% off your third purchase.” These strategies are deemed insensitive and are doomed to fail, causing your brand’s reputation to suffer.
In communicating with your customers through advertisements, use slogans that promote wise spending, such as “spend responsibly,” “frugality is king,” and “buy only what you need.” These are perfect for campaigns that serve as a reminder to customers that you are concerned about more than just their purchases. Consider communicating in terms similar to this;
“We understand that you are doing everything possible to give your family the best life even in these uncertain times, and for that reason, we are packaging our products and services a little bit differently to include a 15% discount on all XYZ categories of products to support your efforts. ” “We are in this together!”
People don’t need a heavy sales pitch during uncertain times when the economy is shaky and they are afraid of losing their jobs. They require compassion.
Compassionate marketing entails giving value now to gain sales later and this is non-negotiable for firms who aspire to survive the storm.
How to Espouse Compassion as a Business
- Reassess your core values to ensure they are relevant to the times.
- Listen to customers, ask questions and respond to their questions.
- Show compassion in your community.
- Provide extra services to your vulnerable customers.
- Focus on value creation, not sales.
- FOCUS ON EXISTING CUSTOMERS
A crucial aspect of business development is customer acquisition. It alludes to the initiatives taken by a business to bring in new customers. No company would continue to operate after its founding without this step. Building a successful business, on the other hand, entails more than just acquiring new customers. If you lack the ability to retain customers, what use is it to gaining new ones?
Getting new customers is difficult and expensive. Studies on customer acquisition and retention cost assert that companies that increase customer retention rates by as little as 5% see an astronomical increase in profits by up to 95%. . The likelihood that a business will sell its goods to new customers ranges from 5% to 20%, but the likelihood that it will sell to current clients ranges from 60% to 70%. Additionally, acquiring new customers is 5 to 25 times more expensive than maintaining existing ones. Profits can be raised more efficiently by leveraging your current customer base rather than marketing to new prospects. The more loyal your customers are, the faster a firm will reach its business objectives
During an economic downturn, consumers have less disposable income due to layoffs, inflation, salary cuts, and so on, so they approach purchases cautiously rather than adventure. Trying a new product with limited resources is a risky venture that many consumers avoid. They would rather stick with a brand they are familiar with. In difficult economic times, customer retention is the king of all marketing strategies.
Trying to increase sales without a strong account management and operating system to keep an existing customer happy is akin to pouring water into a bucket with holes in it. However, identifying and filling gaps in customer satisfaction can assist your company in retaining existing customers, increasing new sales, and propelling profitability even in difficult economic circumstances. Providing world-class support before, during, and after a purchase is an excellent way to demonstrate to your audience that you care about them and that customers can rely on your brand
We have so far talked about two marketing techniques that Small Businesses can use to increase their profits in the post-covid economy, where consumers are in a difficult emotional and financial situation. In the second section, we’ll examine the key strategy that would tie together the two strategies we’ve covered so far and also examine an added suggestion that would put this missive in its proper context. I sincerely hope you will read part II.