Over the last several weeks, three major banks have predicted a recession, and the Federal Reserve’s actions would also indicate that an economic downturn awaits us. The next steps would be to do what you can to protect your portfolio, and, for B2B organizations, invest wisely.
Many organizations turn to cost-cutting measures in response to a recession. While cutting costs where it makes sense is just good business, many companies turn to marketing – and this is not always the best choice. (Side note marketers: If you are not demonstrating the value you bring to the growth of your company, there is no better time to start than right now!)
I am a career marketer, and have spent years working with organizations on developing programs that generate revenue, so I am doubling down on my statement about investing wisely. This current economic uncertainty and pending recession present a great opportunity for marketers to lead in their organizations, and be the revenue generators that CEOs have expected for some time.
Before I detail some of the ways that marketers can lead, let me present the case for investing in marketing during a recession, and why taking this approach will produce positive outcomes in both the short and the long term.
Why Invest in Marketing During a Recession?
A 2010 article by Harvard Business Review conducted an analysis of the last recession in 2007. It shows how different organizations dealt with the economic environment at that time, and labeled the companies as Prevention Focused, Promotion Focused, Pragmatic, and Progressive. Those who were Progressive were the “post-recession winners.” Here is how they were defined:
“These companies’ defensive moves are selective. They cut costs mainly by improving operational efficiency rather than by slashing the number of employees relative to peers. However, their offensive moves are comprehensive. They develop new business opportunities by making significantly greater investments than their rivals do in R&D and marketing, and they invest in assets such as plants and machinery. Their post-recession growth in sales and earnings is the best among the groups in our study.”
McKinsey highlighted a study in 2002 that showed a similar outcome.
Another article by The Business Journals that demonstrates the value of investing in marketing provides further economic proof and highlights that companies that invested in the early 80’s had a 275% greater growth rate over their competition midway through the decade.
Investing is certainly the way to go, and as marketers it is vital we demonstrate to the organization where to invest and how marketing can lead and steward this investment effectively.
4 Ways Marketers Can Lead During a Recession
With this in mind, here are four ways that marketers can best lead during a recession and be effective stewards of the company’s investment.
Customer Insights
A number of years ago, I had a debilitating back injury that kept me hunched over and made it hard to walk. Rather than go the traditional medical route, I consulted an acupuncturist. As I sat in the examining room, he began to touch my neck and then my arms and hands. I respectfully told him that the pain was in my back. He replied by saying, “that is where your injury stopped, but it is not where it started.” After a few treatments, he had me walking normal and feeling like my old self.
Too often organizations speak to their customers’ symptoms – where the pain has stopped – rather than the root cause. They look to sell solutions and services that address some of the issues, but they do a poor job in providing what their customers actually need.
As marketers, we have the data and the ability to collect the insights into our target markets and customers. We can then diagnose and prescribe solutions that address core needs, which in turn will also treat the symptoms. The insight that we collect on our customers can be used to identify new markets, define better target segments, identify target investments, and inform product development.
This can only be done by developing an approach to collecting these insights, but it needs to be something that marketing does consistently in order to keep up with the changing business landscape. This is how we lead a business through times of change.
Sales Enablement
Long gone are the days where sales is marketing’s customer. The customer is marketing’s customer, and one of the best ways we can influence customer acquisition and retention is by enabling sales to create a seamless experience for our customers.
This means sharing the insights I mentioned above. Additionally, it also means training on campaigns, developing sales nurture cadences, and integrating systems so sales has access to the full journey that a customer has taken to get to their purchase point.
If you want to maximize the investment in marketing during a recession and lead with your sales colleagues, look to enable your salespeople to sell smartly with the customer at the center of your strategy.
Data, Analytics and Optimization
Marketing is not a “set-it and forget it” approach. In fact, marketing is a continual state of optimization. It is one of the things that makes marketing such a great profession, we get to continuously analyze, adjust, and measure the impact.
Organizations that are progressive in the face of the recession will invest strategically in marketing. Having the data to identify the strategic investments is a necessity.
Marketers need to be able to advise the CEO and CFO on what investments need to be made and where. They need to analyze data and optimize their go-to-market strategies, and know what marketing activities they should cut, or where to decrease investment.
This type of insight is invaluable and provides marketers a great opportunity to lead the organization and deliver immense value.
Be A Futurist
One thing we know about recessions is they do not last forever. Eventually, this downturn will correct and the economy will again be on the upswing. How an organization prepares for that turn before it happens can make the difference in thriving post-recession or barely getting by.
Marketing needs to lead the way in preparing for the post-recession phase. This means looking to the future to determine what is next in their market, what is next for their customers, and then detailing how their organization will get there.
Organizations that thrive are creative and innovative, and it is these kinds of companies that will make it through the recession; dare I say even grow despite the recession; and come out in the long run ahead of their competitors.
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