- Jul 21, 2022
- By Cam Sivesind
As I was power washing my driveway this weekend, it made me thankful for having the right tool for the job: a new power washer. A regular nozzle on the end of a hose would not – could not – do the trick. That oscillating head pushing out 3,800 PSI through the long washer gun made quick work of a dirty situation.
And as inflation and interest rates rise, it made me think about marketing. Having the right tools to help a business market is vital. The recession is the grime you are trying to wash away. The power washer is the marketing tool that creates a more efficient way to combat the recession/grime and grow profitability.
In difficult times, marketing is more vital than ever, and you must ensure you’re optimizing for return on investment – better yet, return on ad spend (ROAS). You have to keep marketing. You have to keep exposing your brand to existing and potential customers.
Cleaning my driveway is not part of a competition to keep ahead of others in my little 12-home neighborhood. But in business, it is about competing. And to compete you need to market. And to market best, you need to measure what you are doing.
Marketing While Interest Rates Rise
It’s easy to feel doomy and gloomy these days. Gas prices are painfully high, consumer goods cost more, and that avocado toast and coffee at your favorite restaurant costs you a few more bucks.
Are we headed for a recession? To help answer it – and make the case for why you need to rethink how you’re marketing your business – I’ve gathered a few articles from some experts that provide insight and will hopefully help you survive (or even thrive) during the recession.
Ajit Kara, CEO of Tag Americas, put it this way in a recent article for Campaign US, emphasizing that marketers should rely on “technology-based solutions” to keep their brand humming during a downturn.
“The brands that are omnichannel-competitive will be those that make quick decisions based on consumers’ shifting behaviors and have an agile marketing partner who knows how to implement the right strategies with the right creative at the right time,” he writes.
That’s the beauty of tools like multi-touch attribution. It measures, in real time, what is and is not working in marketing campaigns. You know which channels are working, which are not, and how they are working together. Attribution identifies the customer journey, including assigning value to the touchpoints that contributed to a conversion.
Advertising During the Pandemic
When the pandemic hit in 2020, businesses were hit hard. We had several customers take advantage of marketing analytics to home in on the right marketing channel or combination of channels. Here’s a case study where a multimedia company, a LeadsRx customer, helped a power equipment dealer in the Pittsburgh region reach customers confined to their homes but more than ready to use that time to take care of projects around their properties.
Enter the addition of radio advertising to complement the digital and social media advertising that was already working. The goal of radio ads was to put the power equipment dealer in front of those people when the demand was the highest; and if people were going to drive 20 or so miles outside of the city to get equipment, the ads needed to steer consumers their way.
The ads also benefited the power equipment provider’s farming business, as their local growers and ranchers were reminded the dealer had the machines and implements they needed to harvest crops and keep their land in tip-top shape.
“Steel City Media has been a great asset to our company,” the company’s assistant marketing manager said in 2021. “Their data-backed knowledge and guidance has helped us in achieving our biggest sales year yet.”
As with the pandemic, the looming recession should be looked at as much an opportunity as it is a challenge.
As one head of marketing says in this Street Fight article, “I think it’s important as a leader in marketing to understand the low-hanging fruit that can have the largest impact on short-term needs while also keeping the long-term goals intact. You don’t need to throw the entire budget and plan away, but we need to think differently.”
Now is not the time to pull the plug on advertising or other forms of marketing. A recent article in a marketing-focused publication had this to say: “Marketers will need to hold their nerve and ensure that they maximize the impact of spend — and that may just mean taking fewer but more meaningful big swings.”
Little or big swings, you have to measure them. Was that low-cost social media ad (a bunt down the third base line) effective? Or was that spendy ad in a national publication (the grand slam over the right field fence) what brought in the most conversions?
In all likelihood, here’s what contributed to the four runs crossing the plate:
- The bunt (low-cost social media ad)
- A double that advanced the bunter to third (a paid Google ad)
- A walk (let’s call that organic search) that placed another runner on base
- The grand slam (spendy national publication ad)
Measurement of Advertising is Key During a Recession
Multi-touch attribution will examine all of those touchpoints (touched bases, to continue the baseball analogy into extra innings, sorry) to see which contributed to conversions, how much credit each deserves, and how they likely worked together to drive awareness and then action (a purchase).
Even better, you get to learn a little bit about the customer, too. What made them act? What creative drew their interest? Was it the quirky paid social ad, or the paid Google ad with the 20% off offer? Plus, which ad didn’t work? That’s important to know as well. There’s no point in continuing to throw ad dollars at touchpoints that are not working. Oftentimes knowing what is NOT working is as important as identifying what is.
And that customer data can help you craft a better message to them next time, increasing customer lifetime value (LTV) and reducing customer acquisition cost (CAC) for new like minded customers.
“Consumers understand that brands use personal data to craft and deliver tailored messages,” says a February 2022 Merkle study cited in this Insider Intelligence/eMarketer article. “Nearly 9 in 10 respondents are likely to enjoy receiving personalized offers based on their interests and browsing/purchase history; about the same number are willing to provide more information after a positive experience with a brand, per a February 2022 Merkle study. “Consumers are especially willing to share personal information if they receive custom offers or products tailored to their interests.”
Advertising During Inflationary Periods
While I was thinking of titling this blog post “How to Market in a Downturn (Economy),” this Harvard Business Review article (and many other publications, honestly) beat me to it. Being original is tough, I guess.
The HBR article states: “Although it’s wise to contain costs, failing to support brands or examine core customers’ changing needs can jeopardize performance over the long term. Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.”
We do like the authors’ simplified breakdown of the four types of customer segments during a recession (see full graphic/chart in article link) and the approaches marketers should take when communicating to them:
- The slam-on-the-brakes folks – emphasize price; hit wallet-friendly retail price points
- The pained-but-patient – offer a lower-priced option
- The comfortably well-off – continue awareness advertising
- The live-for-today segment – continue awareness advertising; remind consumers, “You can’t live without it.”
No matter the type, the authors say it is important to care for the customers you have, while keeping prospects aware of who you are: “During recessions it’s more important than ever to remember that loyal customers are the primary, enduring source of cash flow and organic growth. Marketing isn’t optional—it’s a ‘good cost,’ essential to bringing in revenues from these key customers and others.”
What Did We Learn?
I know I mixed metaphors in this post (power washers and baseball), but the point is to use the tools at your disposal to do the best job possible – in this case to optimize marketing dollars to keep revenue at least steady, and hopefully improve marketing performance.
If we gleaned anything from the articles cited, it is to continue with marketing campaigns, to measure those campaigns to focus marketing dollars on what is working, and to take that knowledge so customer LTV goes up, CAC goes down, and ROAS improves.
If you have any questions on this topic or need help with getting the most out of your marketing campaigns visit the LeadsRx website.
A Marketing Survival Toolkit
Unbounce, of which LeadsRx is now a part, has an amazing Marketing Survival Toolkit to help marketers create effective, action-taking landing pages. Check it out.