Always Be Prepared
When you’re a small business, it’s somewhat easier to gain customers when the economy is booming like it is now. People have more disposable income – or perhaps just feel more stable – and they make more purchases. This even includes B2B customers.
During a stronger economy, businesses don’t have to try quite as hard to gain new customers. More people buying means more people are searching for your product, and business can feel more like “build it and they will come.”
What Goes Up, Must Come Down
The economy has had a period of strong growth, which is expected to last through 2018. We all know what goes up must come down. What I’m seeing more of in the business and economic news is a trend of economic experts saying that the economy is exhibiting signs of an economic slowdown perhaps in the next two years. Some economists are going so far to speaking of a looming recession or more dire predictions, two to three years out. And some are even saying that the next recession will be intense in proportion to how quickly the economy has grown (not good news).
Here are a few of the predictions:
- GDP Growth Rate to decrease; inflation and interest rates to increase slightly; stock market to decline slightly.
- 75% of the ultra-rich forecast a US recession in the next two years
- Strong economy into 2019, but watch out for 2020
What do these economic predictions mean for marketing your business?
Unfortunately when the economy starts to slow down, the first thing most businesses cut is their marketing budget – and it’s the worst thing you can do.
There are several reasons this may occur.
Businesses may assume, since they haven’t had a very hard time finding customers in the past couple of years, that some of their marketing budget – the budget used to attract new customers – can be diverted to other expenses. It wasn’t hard yesterday, so it won’t be hard tomorrow.
They may forget, or have not experienced, the last time business slowed, and therefore not realize the impact marketing continuity can have on their business.
Sometimes, for some who hold the purse strings, pieces of marketing can be seen as “fluff”. (It never should be fluff; we always recommend your marketing be efficient!) And of course, when you’re looking at employee salaries versus what is perceived as fluff, for example, it’s easy to see the clear winner.
Or it may just be part of overall budget cuts; if everything needs to be cut 20%, of course marketing will also take a hit.
Your marketing budget may actually need to increase during a slowing economy
As mentioned, a booming economy makes it easier to attract clients. Alternately, a slowing economy can make it harder. It’s logical to follow this path to the point that during times when it is harder to attract clients, you may need a larger budget than before.
This may not necessarily mean a larger dollar amount. It may, however, mean a larger percentage of your total budget, even when your overall budget is smaller.
If it’s harder to gain new customers, this drives customer acquisition cost higher, which means if you want to keep the same number of new customers, you must actually spend more. If your budget stays the same while your customer acquisition cost increases, the end result is fewer customers.
This is exactly why you need to start planning NOW, when your business and marketing is stronger.
A general rule of thumb is 20% of your overall budget should probably be earmarked towards marketing. In slower economic times, you may actually need to increase that percentage to 22%, 25%, or in some cases, more, to be able to attract new customers at the same rate as previously.
Your marketing needs to be more efficient and laser focused during a slowing economy
When should you work on this efficiency and laser focus? Not when you’re in the middle of struggling with business slowing and scrambling to bring in as much money as before. When this starts to happen, people in the organization may start to get scared, and that can make it difficult to implement new strategies – even when they are designed to be more efficient and provide a better ROI.
Slower business means that the people holding the purse strings (even if this is you as an entrepreneur) would rather stick with the tried and true – things that have already been working.
One thing to keep in mind – just because a strategy was working well when the economy has been growing, does not mean it will work as well when the economy starts to slow – or at all. The very change in the business climate can also mean a change in the effectiveness of different strategies despite how they were performing before.
You need to start planning for marketing during slowed economic times NOW
If the bad news is that the US economy is going to experience another recession, the good news is that, according to what the experts seems to be saying, it is expected to be at least a year to 18 months out.
They expect the economy to continue to grow and be strong through the rest of 2018, and likely continue well through 2019.
This means that you have time to plan now. You can begin to implement strategies and have some things in place that will allow your marketing to be more efficient later.
Marketing strategies you should consider implementing now
Some of the best things you can do now, that will help you with your marketing in the future, revolve around automation.
When the economy slows, you may have to do more with fewer people. The best way to accomplish this is through marketing automation in the spots where it can best be implemented and make the most sense. How and where you want to implement this type of automation is very unique to your business – and we can help you explore some options during a free marketing strategy call.
You will want to have a solid, professional website. It doesn’t need tons of bells and whistles, but you want it to look professional, and where possible implement some automations that allow your prospects to contact you more easily. For example, we have a chat bubble that pops up on this website in the bottom right corner. It allows a quick and easy way for someone to ask a question. Best of all? There’s no ongoing monthly fee to a third party vendor (at least not at this time – you never know what may happen in the future!)
You also want to make sure that you know who owns your website. Think it’s you? It may not be. If one of the things you end up needing to do in a couple of years is cut your website hosting expense, do you know what will happen if you end your relationship with your current vendor? I’ve seen a lot of companies whose web designer, developer, or host, almost holds their website hostage, forcing ongoing payment or losing the entire website, and in some cases even the domain. It’s so prevalent that I even wrote an article on what you need to know before setting up your business website. If you don’t know who owns your website and domain, find out now, before it’s a critical time and you are presented with no choices.
While you’re at it, your entire online presence could probably use a quick audit. Many of the sites you’re using online – such as social media – are free, and therefore make a great piece that you will likely want to keep in your marketing portfolio during any economic downturn. Do a quick check and make sure that these sites are set up to help your business be a success now, before you’re to the stage of urgency. Need help with this? We offer a free social media audit.
One of the most important places we still recommend businesses focus efforts is on email marketing. You may like social media – but you have little control over it. The company can make changes when they desire, which may impact your ability to communicate with your customer base. However, you have control over your email database – so that is definitely an area that you don’t want to completely ignore. A couple of the best ways to have automation is through email drip marketing campaigns, and through having ways for other marketing tactics you’re using – such as content marketing – to automatically be shared with your email database. If you’re an ecommerce business, some automation such as abandoned cart emails can also help boost your business.
Freeing up your staff from answering basic questions from customers can also be a great way to be more efficient (and better serve the customer). Chat bots can be a great way to handle this – and can be surprisingly affordable with new technology available.
Lead generation will continue to be an important part of your marketing strategy, and the best way to handle lead generation funnels is to have automation in place so that nothing slips through the cracks. We have an online course that walks you through the different pieces of a marketing lead generation funnel so that you can understand all of the items you need in place – and start developing your systems NOW before it’s urgent in the future. It’s important that you have a basic understanding of what pieces need to be present to have an efficient lead generation funnel. The training also discusses important places that losing prospects can happen. It’s a great overview of the system – and once you have a good understanding, you will know where you need professional help to work on setting up some automation of these pieces for your business.
You will also want to take steps now to make sure you have several months of operating expense available for your business. Start talking to your accountant now to make sure you strengthen your overall business finances.
Do you need to begin brainstorming which strategies may help your business later? Request a free marketing strategy call and we can talk through where you may need the most help, and what options are available to implement these tactics.
Vicky is the CEO and Chief Creative Strategist of Vicky Wu Marketing. She draws from 30 years of experience at the CMO level, the CEO level, marketing for Fortune 500 companies and multi-million and multi-billion-dollar organizations, PLUS strategies learned helping startups and nonprofits with limited budgets … now focusing on providing SMBs with effective and efficient marketing strategies – giving them access to the same level of expertise as the really big guys with deep pockets, that they may not otherwise be able to access.