- June 9, 2023
Recession-Proof Strategies: How Marketers and Data Brands Can Thrive During Downturns
The end of the pandemic last year witnessed ease in restrictions and the markets were finally booming. As we tread ahead into 2023, the market seems more delicate with a recession looming, growing inflation, declining consumer spending, and layoffs across big brands and industries. What does this mean for marketers and data brands, how does one thrive in a situation such as this and recession-proof their brands?
Most recessions have marketers in a tizzy as no two recessions are alike. However, marketers need to analyze the previous trends and consumer behavior patterns that have helped successful brands to navigate and sustain during a recession. By identifying the success trends and strategies one can understand the consumption pattern during a recession and align their strategies to ensure results.
Although consumers begin to get more stringent with their spending, sales start to drop, and businesses look at ways to cut costs and slash pricing, should marketing communications and customer research cease during a downturn?
This is one of the biggest downfalls for brands that could succumb to competitive pressure and even fail to sustain in the longer run. Though cost-cutting is much needed during a recession, brands that fail to assist customers and provide support in line with their changing demands can jeopardize business performance in the long run. What marketers need to realize is that great products and advertising alone don’t attribute to great sales but it also depends on how confident customers are about their future, how trusting they are of the economy and business, and the values and lifestyles they embrace that could encourage consumption.
How can data brands thrive during a downturn?
Marketing teams and platforms are often treated like cost centers during a recession. Marketing costs are cut more quickly than production costs. The pressure on sales is at an all-time high but how can sales perform without a robust marketing strategy in place? This is the time that account management and post-sales service seems most critical. Remember that long-time customers are the critical contributors who are an enduring source of cash flow and organic growth, more so during a recession.
Yes, cost-cutting is critical but businesses need to be careful about distinguishing between the necessary and wasteful at such times. We’ve all seen how strong brands have held up better during recessions. Building and sustaining strong brands that customers trust remains one of the best ways to navigate business risks.
Begin by assessing your current brands, products, and services. Forecast the trends of those which have bleak survival prospects, the ones that may suffer declining sales but can be revived, and the ones that are likely to thrive during the recession and afterward.
Plan for the Long Term
Sales will decline, but brands should not succumb to pressure and alter the company’s fundamental positioning during such times. For instance, marketers that cater to niche or upper-income segments may attempt to move down-market which can be detrimental to the brand. Rather plan for the long-term, reassess priorities, allocate funds redefine value, and reallocate funds.
During recessions, marketers need to stay flexible, adapt their tactics and strategies in preparedness for a long, difficult slump, and yet be prepared to thrive quickly when the upturn comes. For instance, having pre-packaged datasets that are tested for accuracy and are ready to roll out on short notice. A lot of customers are more open to trying out new products when the situation improves but the brands that wait for the economy to fully recover will succumb to better-prepared competitors.
Position for Recovery
Data brands that make it through the recession by focusing on consumer needs will be strongly positioned for tough days ahead. However, companies must also understand that people’s behavior may change following the recession so they need to offer products and communicate messages aligned with the needs of new consumer segments.
The good news is that when recessions end, consumers’ attitudes and behaviors also return to “normal”. What brands need to understand is that customers examine brands more than brands do.
Build on Customer Loyalty
Customer loyalty is an asset to brands during a recession and even otherwise. It is a given, servicing old clients for new business is easier than bringing in new clients. Make sure your existing customers know how much you value and appreciate their continued trust. Use email campaigns to share positive messages, coupons, surveys, and testimonials, and keep communication lines open and responsive. By staying in touch with your customers, you’re showing stability, giving them the confidence that your brand is here to stay regardless of how the market is performing.
Study your Competition
Keep a close eye on your competitors, do mystery shopping if feasible, and see the offers and communication strategy that is working for them. Don’t make the mistake of extending the same offer but skillfully improvise without taking a hit. Learn up on recession marketing in the data industry and apply the tactics that work well within your customer and industry segments.
Create Tiered Data Packages
Have you ever tried “tiered data packages”? This can work wonders during a downturn or otherwise. It is a great way to attract new clients and offer value to the existing ones. Offer at least three different pricing tiers with additional perks on the higher-priced data packages. Not all clients are looking for multi-channel data or data insights, are they? Most often clients are looking for email ids and mobile numbers. Create a wide range from basic to premium data packages and upsell basis the market condition at a later stage. Offer a free version of the data sample if feasible and upsell to a higher package when the time is right.
Changes are good but not too many
Change is good, but stay focused on the purpose rather than change just for the sake of change. Rethink your market, strategy, and customer communications. Focus on customer value and the business will grow eventually. Customers feel connected to brands that help them address their business challenges, especially during such difficult times.
The data industry has been fraught with multiple challenges ever since its inception as a business service. From data decay to growing competition, data accuracy, relevance, and more such challenges have made it difficult for good brands to thrive and make a mark. Staying recession-proof in such times requires brands to stay closer to the customer and understand ways to arrive at a mutual win-win.