A recession is described by Investopedia as a macroeconomic term that refers to a significant decline in general economic activity in a designated region. According to this explanation, Sri Lanka is currently in a severe recession with almost all economic activities hampered, mainly by the current drastic shortage of foreign currency. The key factor in this disruption is the current scarcity of fuel which affects all activities which produce a chain reaction.
The most impulsive reaction of entrepreneurs, especially those in small and medium-sized businesses, is to cut marketing spend. Specifically, in Sri Lanka, in such situations, entrepreneurs try to reduce advertising and promotions in order to offset them with other essential operating expenses.
Keeping a close eye on spending is good practice in times of crisis, but cutting back on marketing unnecessarily is not a good move. As I have always pointed out in my articles, the income generated from the sale of goods or services pays for bills, salaries, office rent and all other expenses. A business cannot exist without sales. The important thing is that the organization’s marketing effort paves the way for sales, which generates revenue. Therefore, it is a mistake not to do marketing during recess.
Why should you continue to trade during a recession? Most of you will be surprised to learn that marketing during recessions most often leads to growth, let alone survival. organizations that continue to run continuous marketing campaigns remain at the forefront of customers’ minds. When the recession ends and the customer has money to spend, he subconsciously returns to the salesperson who has been on his mind during recess.
This is the reason why we continue to see advertisements and promotions from large organizations in Sri Lanka, even at the height of the financial crisis. For example, companies that continued to market during the Covid-19 pandemic recovered, while many that stopped marketing could not survive.
By maintaining your marketing initiatives despite a recession, you send a message to your audience about the strength and reliability of the organization and your attitude towards the market. Any customer will look for these strong characteristics in a salesperson in troubled times. Your existing customers and future prospects will be attracted to the level of stability you can provide, even if you’re not at your best.
On the contrary, reducing marketing during a recession will reduce your online and offline presence, leaving plenty of room for competitors to exploit and overtake you. The result in such a scenario is that anyone who disappears from the market due to a lack of communication will have a very hard time coming back.
Your existing and loyal customer base is one of the best assets during a recess. They give you the best chance of sailing through the storm. Approaching existing customers is easier, much cheaper and more effective than seeking new customers in times of stress.
Without a doubt, during a recession, more work needs to be done. However, since there is less “marketing noise” for your marketing message, you may not actually need to put in the effort and work with less effort. What you need to do is keep the audience engaged while being consistent with your brand image.
For this, creating a monthly marketing plan that includes combinations of what you were doing before the recession is critically important. Therefore, you can use the same social media posts, emails, PR content, and conventional ads, perhaps with a different message depending on the situation.
How you encourage your audience is important. Your company’s marketing strategy should always be up to date, but this is especially true when the market and economic conditions are showing a slump. Ensuring your brand projects a good message aligned with the delicate mood of your customers and prospects and staying clear of any animosity is a critical step in this process. Your communication should uplift and inspire your audience to nurture a deep and lasting emotional connection.
In fact, research finds that advertising efforts that emphasized emotional involvement were more effective than those that promoted technical signals, such as special offers or discounted prices, during tough times. organizations that prioritized transaction-based messaging were found to be less profitable than companies that prioritized emotional engagement.
However, there are factors you need to tweak, tweak, and adjust when marketing in a recession. You can anticipate needed improvements when consumer incomes continue to decline. You must not only continue to market your business during a recession, but also change the way you do so due to financial restrictions, shifting priorities and changes in customer buying habits, without sacrificing marketing efforts and scope. A recession can affect two groups. Some companies really benefit from it, while others suffer from it. The main distinction between these two groups is the nature of the products or services they offer. It’s a universal fact that no matter their financial situation, there will always be customers for businesses that sell to their needs. Therefore, it would be wise for your business to review its offering and skip or at least include essential services if it is currently selling goods or services that are not directly essential.
Whether your business is small or large, you need to keep improving your online visibility. Be sure to correctly indicate in each of the profiles that you are still accepting new clients.
You need to constantly update your hours, promote your latest offers, and keep interacting with customers. In Sri Lanka, as in many other countries, the reach of social media has improved dramatically and has become the most essential tool, eclipsing conventional advertising.
Whether you decide on the same or lower marketing budget during this period, you still have to modify the methods, depending on the situation and the product or service lines.
For example, people spending more time on digital platforms in times of financial constraint still need to modify methods, depending on the situation and product or service lines. For example, people spend more time on digital platforms in times of financial hardship than spending money on newspapers or new cable TV channels. Therefore, it is important to pay attention to the communication channels that work well.
Even in normal times, the target audience is one of the key factors in marketing. While you should always target the right demographic with your marketing and advertising, during a recession accurate targeting is crucial to survival. So much so when the marketing budget is limited because it avoids wasting money on ineffective advertisements.
You may need to adjust your targeting to focus on a specific audience niche or perhaps a new niche. Find out what your customers’ current needs are, then modify your targeting accordingly. To attract the right audience and increase the return on your marketing investments, you also need to segment your online efforts based on any new pattern and retarget your website visitors. Finally, you need to continuously monitor your campaigns to determine which of them are performing better versus which are underperforming.
This helps you readjust the marketing effort if necessary. You can prioritize the most effective ones and discard the others to save money on the one hand and increase sales on the other. Additionally, there are many examples around the world of businesses that have thrived during the Covid-19 pandemic, largely through well-concerted marketing efforts.