As brands enter a recession, marketers tend to make snap decisions, cutting budgets quickly or favoring last-click low-funnel channels. Though some of these actions may benefit your business in the short term, you may see a longer term impact through increased user churn or an unfavorable user mix. Our recommended action plan will take you through thoughtful steps to determine how you should approach marketing this year to focus actions on what’s right for your business.

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1. Monitor the behavior of your users

This is an extremely important first step in order to understand what subsequent action you need to take. Is user behavior actually changing for your brand? Some brands are recession-proof and may not see a decline in user behavior or purchases. Marketers should monitor purchase rates, the behavior of older cohorts and general user behavior. Has your email unsubscribe rate increased or is your AOV declining? By evaluating your own users, you can determine if next steps are necessary for your marketing efforts.

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2. Check in with your competitors

As reported by Shopify, more than seven out of ten consumers bought from the competitor of their go-to brand between May 2021 and May 2022. In a recession, consumers tend to shop around, searching for better price points and value. That said, “loyal customers are worth far more than short-term sales. In fact, a 2021 study estimated that loyalty increases a customer's worth by 22 times.” (Shopify). As consumers become more stringent, marketers should understand where they currently stand in the marketplace. Are your value propositions and price point still competitive within the space you operate? Have your competitors increased their advertising efforts? Not sure where to start with a competitive audit? BGN offers robust audits, ranging from a competitive analysis to media strategy audits. Reach out to us at hello@backgroundnoise.co to learn more.

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3. Test and learn

Most advertisers will cut budgets from advertising channels that yield a high CPA. The simplest reaction to a recession is to reduce media spend but marketing is necessary to sustain your business through a recession. Instead of leaning into this knee-jerk reaction, take a more thoughtful and calculated approach. Create a test & learn plan that will help you get the most out of your advertising. Pressure test your current channels - now is the time to hone in on creative, landing page and campaign optimization to make every dollar count.

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4. Find a balance between branding and sales marketing

Many brands scale back their marketing buckets by shutting off brand marketing. However, there are significant long-term effects of cutting your brand budget in order to focus on short-term results. Market penetration is difficult to maintain without a brand investment and it won’t be long before prospective customers lose sight of your brand and current customers decrease their brand loyalty. Some research shows that “consistent presentation of a brand… can increase revenue by 33%” through a continued focus on maintaining brand equity (Qualtrics). Rather than cutting your brand marketing budget, find a balance between brand campaigns and direct response to maintain your presence in the market.

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5. Reevaluate your measurement strategy

In a recession, marketers often begin to over-value last-click attribution, as this attribution method is the easiest to understand. However, last-click attribution can be misleading as it places emphasis on low-funnel, direct response channels. You may unintentionally ignore a large part of your user journey. As marketers become careful with each dollar spent, it may not be feasible to conduct a measurement study to fully understand the best attribution method for your brand. That said, there are simple ways that you can evaluate where your customers are coming from and what is driving their purchases. Reach out to hello@backgroundnoise.co to learn more.

At the end of the day, recession-marketing is not one size fits all. Marketers need to evaluate what their business needs as each business and industry are unique. Create a thoughtful plan, approach with caution and test away.