Recession Business Marketing Strategy Survival Kit
"Life is 10% of what happens to you and 90% how you react to it."
Charles R Swindoll
The same can be said of your business.
In South Africa, our biggest mountain was the legalisation of hemp and cannabis, as we are getting closer to the summit, we find another incline called the coronavirus recession. This is not a localised event but a global event. These challenges can be good for business or can destroy a business. Reality is that even if we did not encounter this pandemic, at some point you would have to face a downturn in your business' lifespan.
Reality is everyone globally has been talking about a recession for years, Don't feel bad if you have not done a recession marketing strategy, there are a lot of you that haven't. But it's not too late, at the same time don't be an idiot, you need to craft a recession marketing strategy now.
To help you out, I have looked into the most successful recession marketing strategies, and simply created five main rules for you to follow:
#1: Don't Cut Your Marketing Budget
Should you cut your budget? No, this will be your first gut instinct and, yes, it will save you some money in the short term, but it will leave your business weaker and less profitable in the long-term.
The Hemp and Cannabis industry have products that can help consumers, and this is the perfect time to build a recognisable consumer brand. Makes sure though that your product marketing is viable and do not sell myths as facts. Do not buy cheaper ingredients, in other words do not compromise you product for profit. Rather look at your loyal customer's spending behaviour.
#2: Analyse Your Target Audience's Recession Behaviour
The success of your recession marketing strategy will depend on your audience spending behaviour, trust me, if you don't, read this Harvard review.
In times of a downturn, it is vital to know your existing clientele change as the world around them changes. What your target audience needs are in one decade may not be true in the next one.
Finding out what your target audience's motivation and behavioural trends are during an economic downturn. You will find that your customer will fall into the following categories.
Slam-on-the-Brakes Consumers: Feels most vulnerable and hardest hit financially. This consumer will cut all types of spending by eliminating, postponing, decreasing, or substituting purchases (remember this). Although this is mostly your lower-income consumers, you will find that anxious higher-income earners can fall in this group as well.
Pained-But-Patient Consumers: This consumer is more resilient and optimistic, they are focused on long term recovery and know that it will have a short term impact on their behavioural spending. This consumer will economise less aggressively the Slam-on-the-brakes, but still cuts budgets where they have to. This will be your most extensive consumer base, they remain optimistic about employment and also represents the wides range of income levels.
Comfortably Well-Off Consumers: This consumer feels that they can ride out these challenges in the economy. They consume more conservative but are selective on spending even though this is a substantially smaller market segment, they are more confident in the stable of their finances.
Live-for-Today Consumers: Carries on as usual and for the most part, they are not concerned about saving. This consumer is more likely to make major purchases and are mainly urban and young. They spend their money on experiences rather than stuff (except for electronics). This behaviour is unlikely to change unless they become unemployed or loose their alternate revenue stream.
Regardless of which consumer group, their purchases will be based on the following:
Essentials – necessary for survival and well-being.
Treats – indulgences and considered justifiable.
Postponable's – purchases that can be reasonably put off.
Expendables – unnecessary or unjustifiable.
Find out in which category your consumer falls to create your recession marketing strategy and build a marketing plan around that consumer group/s. Reached out to your most loyal customers ask them what they spending their money on during the recession. This will help you tailor make your recession marketing strategy. This will be different for every business and may entail, reward/loyalty programs, newsletters, referral discounts. Make sure you stay seen otherwise they will be more likely to move to your competitor who is visually marketing themselves.
For the medicinal Hemp and Cannabis sector, this could be a huge opportunity of growth. With the pharmaceuticals being so expensive, and consumers are looking for alternatives, there could be an immediate gap that could be filled. It will depend on whether you are willing to adjust your price point to create a more competitive market advantage. Keep in mind, though, big brother is watching and that this is not a time to market a cure for all ailments. You need to be selective on your wording. Stay honest and make sure that your information is on point.
The trick to successful marketing/advertising during a recession lies in consumer psychology and emotion. A recession is a trying time for most consumers, and there's an undercurrent of fear, worry, and stress beneath the surface. By tapping into and appealing to the emotional side of consumers, you have a better chance of connecting with and persuading them.
Research shows that campaigns that focus on emotional engagement tend to be more profitable than ad campaigns that focus on rational messages (such as low prices or special offers), even when times are tough.
#3: Analyse and Track Everything.
During a recession, knowing precisely what return each marketing investment will yield is essential not just for growth but also for survival.
There are plenty of ways to market your business through various funnels. You may want to look at both conventional advertising as well as online marketing.
Print advertising; some magazines are targeted only at the cannabis sector, these magazines are helpful by targeting audiences that may not have heard of your product. Instead of selling, create an Advertorial, tell people what makes your brand unique and how it can help them.
In-store; In recent months CBD products have been introduced to main stream consumers through major retailers as well as specialised CBD stores across SA, find out how you can help these stores sell your product. This could be through training, leaflets with more information and even creating shelve awareness.
Website; This will be one of your biggest drivers during this time. Your website should have the most relevant information. It also needs to show that you know more about the product than just giving people a, Fuck Yeh, Here I am! Show them your knowledge of the product and back it up by the research that you have done through cross-referencing your site to the research sites you have used. This can be done in the form of a blog and should be done on at least a weekly basis.
Digital marketing; For the hemp and cannabis industry, this is a bit of a conundrum, especially with shadow banning and not being able to show price points. There are ways around this that could be beneficial. Become the ambassador of your product, ask your customers to rate your product or even go as far and educate the consumer about your products.
Digital marketing is not necessarily restricted to Facebook, Instagram, and so forth. You can look at your contact list and give information you want to your consumer via WhatsApp and Email marketing through either short messaging or newsletters and remember it is not just about selling, during this time it is about education and informing.
#4: Focus on Existing Customers
Make sure your marketing strategies are focused on your most valuable, happy, loyal customers. Keep them happy by rewarding them for their loyalty.
Word of mouth the most powerful tool in this time. Happy customers will repay you in the form of recommendations and reviews, especially if you can use analytics and data to show how you benefitting their company during rough times.
#5: Boost Conversion, Testing, Tweaking, Repeating
You can not change peoples spending habits, but what you can do is track and check how your marketing is working for you if it's not, then tweak it. When you find the formula that works for you, look at how you can repeat this. You must remember that this is not just applicable as we said before, to external events that will change your customer's spending habits. So you will need to adjust your marketing accordingly.
If you're worried about your business strategy during this recession or need help getting all your ducks in a row, we are more than happy to help you figure it out.
I recommend you contact us — the recession is only at its infancy, once the downturn actually hits you're going to have a lot on your plate.
Given that most businesses still have not recovered from the 2008 recession, make sure that your recession marketing strategy can survive this marathon.