Change is the only constant, as the adage goes, and this couldn’t be truer for marketers heading into 2023. Recession risk, inflation, and supply chain disruption loom over businesses of all shapes and sizes. Marketing in a time of economic uncertainty is certainly a challenge, and those who fail to embrace new ways of growing their audiences and increasing engagement risk falling behind the competition.
The numbers tell the same story. CMOs cite labor, supply chain, and inflation issues as potential growth headwinds in 2022. Moreover, 28% of economists surveyed by the Wall Street Journal expect the United States to enter some form of recession within the 12 months. That’s up from 13% from just one year ago.
And it’s not just macro factors. Digital ad prices are spiking between 20% and 40%, the growth of social media ad effectiveness is slowing, and the only thing that remains certain for the remainder of 2022 is uncertainty. Thankfully, we’re here to provide some tips, tricks, and strategies to help marketers navigate potentially unsteady seas ahead.
Tip 1: Don’t be tempted to slash marketing
It might seem counterintuitive, but companies that don’t reduce marketing budgets during economic downturns experience larger returns than in good times. That’s according to Wharton marketing professor David Reibstein, who also explains that it’s not about how much you spend on aggregate, but relative to the competition.
It’s a similar concept to buying low when the stock market is in a downturn, for instance. While your competitors reduce their budgets and therefore overall visibility, companies with the cash and commitment to marketing during downturns get a larger share of overall exposure. The key to marketing in a time of economic uncertainty is to focus on channels that are truly complementary and accretive to your audience and business.
During downturns, you’ll want to focus on outcomes-based marketing channels that allow you to manage your budget according to projected returns. It’s all about spending on endeavors where results are specific, and ROI is tracked in detail. Channels that fit this bill that you may not have previously considered are Digital Out-of-Home, Programmatic Email Advertising, and Programmatic Direct Mail (PDM).
Tip 2: Focus on Customer Retention
Consumers will be actively bargain hunting during times of uncertainty – and you really can’t blame them. So you’ll want to shift your attention to retaining and growing business from current customers. Loyalty to your brand will be tested, and customers will be hungry for more value for their money than ever.
Because current customers may already be at least satisfied with your products, you’ll want to invest more in experiences and services in both what you’re offering and how you’re marketing. That extra personalized touch in your re-marketing messaging or swift customer service might make all the difference.
Tap into your customer CRM database to optimize these experiences and results. For instance, PebblePost recently conducted an analysis for a premium meal kit brand using our Customer Engagement product. The goal was to re-engage a large list of lapsed customers and win them back in the most efficient way possible by optimizing the audience.
When compared to a randomly selected control group, the optimized audience saw a 91% higher order rate, 44% more efficient customer win-back cost, and an 81% lift in win-back rates. Tackling existing and lapsed customers with a data-driven approach is key to marketing success in stormy economic seas.
Tip 3: Rethink what you’re promoting – and how
Finally, you’ll need to reconsider which products or services you’re promoting to ensure profitability. Think about your mix of best sellers and potential new additions, which products you “own” vs. those provided by a third-party and shift your attention to products that are most likely to be in stock.
Marketing in a time of economic uncertainty calls for locking in profits in the most timely, cost-effective, and predictable ways possible. Therefore, reframe your promotions and marketing for tighter time frames to complete sales efficiently. You may have higher ticket items with longer sales cycles that won’t provide the biggest bang for your marketing buck – until boom times return at least.
And if you’re looking to make an impact during this year’s Holiday Season to make this year a certain success, now is the time to start dialing in your marketing efforts. Start by A/B testing your offers, messaging, and creatives today with the intention of applying any learnings with the highest level of certainty once the holidays do roll around.
This is particularly true when it comes to PDM because you’ll need a longer lead time for A/B testing than traditional digital channels. As digital fatigue sets in for many consumers, with open rates decreasing and social ads losing effectiveness, you’ll want to ensure that PDM is a core part of your marketing mix heading into the holiday season and beyond.
Weathering economic uncertainty is possible
Supply chain issues, inflation, and certain macro headwinds are unfortunately out of everyone’s control. However, if you follow the above tips, you’ll be in a much better position not only to survive, but to thrive as a business. Resist the temptation to slash marketing budgets at all costs, and instead focus on high ROI channels. Segment your database to engage current or lapsed customers for low-hanging fruit. And focus on promoting your best products in the most effective channels possible, with PDM as one of your core pillars.
Want to learn more about how you can use the PDM channel to drive efficient performance and sustainable outcomes throughout the customer lifecycle? Check out some of PebblePost’s PDM solutions for businesses of all stripes or contact us directly:
