How to Drive Growth with a Looming Recession
As businesses face the challenges of a looming recession, it becomes crucial to adapt and strategize for growth. While economic downturns can be daunting, there are opportunities for businesses to thrive by focusing on their end customers, treating media as an investment, leveraging new platforms and partnerships, and empowering their people.
In this article we will explore these strategies in detail, providing insights and practical tips on how businesses can drive growth during uncertain times.
1. Solve for Your End Customers’ Challenges
Understanding your end customers and their needs is essential for driving growth during a recession. Whether you are a B2C or B2B business, it’s important to anticipate the challenges your customers may face during an economic downturn and optimize your products or services accordingly. Research shows that 90% of customers are not loyal to a brand, and 58% of customers are changing their purchasing behaviors from brands. Therefore, it’s crucial to adapt to their shifting needs or attract new consumers.
To do this, businesses need to identify what is necessary for their customers and focus on addressing their critical needs. For example, if you’re in the automotive industry, understand why customers are buying a car. Is it primarily to get themselves from point A to point B, or are they looking to transport something? By understanding the underlying challenges your customers are trying to solve, you can optimize your offerings and marketing messages to resonate with their needs.
2. Treat Your Media as an Investment
During a recession, businesses tend to pull back on marketing expenses, viewing them as short-term costs. However, it’s crucial to shift this mindset and treat media as an investment in the future. Instead of focusing solely on cost-cutting, think about how your media efforts can generate long-term growth.
Consider using terms like “investments” instead of “spending” or “budgeting” when discussing media strategies with your team and stakeholders. This can help create a shift in mindset, emphasizing the long-term benefits of marketing efforts. Think like a venture capitalist and invest in platforms where your end customers are active. Take advantage of your competitors’ pullback in advertising during a recession to have a bigger voice in the market. Research shows that two-thirds of eventual purchases come from top-of-mind awareness, which is driven by advertising. By continuing to invest in advertising while competitors pull back, you can capture market share and increase brand visibility.
Additionally, it’s important to ensure that your value propositions address the needs of your customers during a recession. Understand your customers` pain points and how your products or services can solve them. Communicate these value propositions effectively in your marketing messages to show customers that you understand their needs and are there to support them during challenging times. For example, during the COVID-19 pandemic, Instacart grew 12.5 times by investing in paid search ads while their competitors went dark with ads. This strategic move allowed them to capture a dominant position in the market that is likely to continue to extend well beyond the pandemic.
3. Scale Your Media Through New Platforms and Partnerships
During a recession, customer behavior may shift, and they may turn to different platforms for their needs. It’s essential for businesses to identify where their customers are likely to be during a recession and invest in those platforms accordingly. For example, during COVID-19, people turned to platforms like TikTok for entertainment and escapism, while during the 2008 recession, Netflix saw a significant increase in subscriptions as people looked for affordable entertainment options.
Consider partnering with a platform that aligns with your target audience’s interests and behaviors. During an economic downturn, many platforms may be open to collaborations and willing to offer benefits to help businesses reach their audiences and drive sales. Don’t be afraid to ask for help or negotiate mutually beneficial partnerships.
4. Empower Your Employees
Empowering your team with the right mindset and tools is critical to achieving growth during a recession. Encourage long-term thinking mindsets that view marketing as an investment rather than a cost. Balancing the art and science of marketing, and demonstrating the potential for long-term gains, can help convince finance teams that marketing efforts are essential for the future.
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