In the ever-evolving economic environment, it’s hard for companies to know where they stand. How does a company strategize during a recession or economic downturn? How should startups approach marketing in such an unpredictable environment?
There are several best practices for startups considering marketing today. From simple tactics like tailoring your messaging to more complex efforts like rethinking the buyer’s journey. Startups can also strengthen the company’s recession strategies and overall preparedness through a number of different measures.
Recession for Startups
While the recession affects businesses of all sizes, startups have their own challenges. During the recession, the total financing of capital investment decreased. The recession reports of 2022 suggest a fall of 23 percent fall in fundings alone. This is one of the biggest quarterly drops in funding in a decade.
When funding is tight, a common mistake startups make is to cut their marketing budget. This is a familiar and understandable reaction to a difficult period. However, research shows that strategic investment in marketing is key to weathering the recession, and companies that focus on building strong brands generally fare better.
There are no set tactics that will work for every business, but the following strategies can help startups capitalize on marketing during these times of economic uncertainty and strengthen their business for the future.
- Study of recessions
- Rethink brands
- Refine marketing experiences
- Measure performance
Let’s try to understand these marketing strategies.
Study of Recessions
Regardless of whether the economy meets the technical definition of a recession or not, consumers are trying to navigate conflicting information and an unpredictable economic environment. Thinking about the psychology of your customers and how different segments might react to uncertainty can help your marketing team effectively craft messages that reflect the concerns and priorities of your current core audience.
Research has repeatedly found that for businesses of all sizes, empathy is key to connecting with customers—especially during difficult times. Empathy also has tactical implications for brands. Cultivating your understanding of the mindsets and key concerns of your core customers will only pay off if you translate that understanding into actionable marketing actions.
Regardless of the industry you operate in, the key to achieving brand expression is reaching the right audience and delivering the right message. In times of economic uncertainty, the “right message”—one that keeps your brand relevant and compels your audience to act and change—can be quite different from the message delivered in more stable economic conditions. If you’re thinking about how to do your marketing in tough economic times, don’t hesitate to refine your message. If it doesn’t feel right now, take the time to make strategic changes.
Refine Marketing Experiences
Marketers always have a wish list of things they would do with unlimited resources, but in the midst of navigating the limits of economic uncertainty, startup marketing teams still have plenty of tools. The goal is to find high-ROI tactics that can be deployed quickly, integrate seamlessly with existing operations and workflows, and require minimal engineering overhead.
Creating and maintaining performance metrics is part of any high-performing marketing team, but it’s especially true for startups. As you strengthen your foothold in your market, achieve increasing brand visibility, and strive to grow your revenue. It is imperative that you continue to collect as many signals as possible from your key audiences to let you know where you are achieving your goals and where you lose customers.
Tracking engagement and conversion metrics is important in any economic climate, but when the economy is down, everything you think you know about your audience and what converts them can change. With a volatile economy, every day is a new day for businesses, and you should use your marketing data to ensure you’re acting on the latest understanding of your audience.