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On The Drum’s Predictions Deep Dive, Nathan Ulery of B2B shop The Mx Group makes a strong case for weathering the recession and spending on brand building, customer retention, digital transformation, and talent.
During a recession, you may be tempted to cut spending. Nathan Ulery of The Mx Group argues that we should do the opposite. /Ibrahim Rifath via Unsplash
In 2023, with the looming recession weighing heavily on the table, department after department analyzes resources, projects, people, business development initiatives, and future campaigns.
The reflexive reaction of CFOs gearing up for economic turmoil is to find an item under “Marketing” and start cutting from there. However, as the chief operating officer of my agency, I decided not to move the organization out of fear of uncertainty. By harnessing the power of marketing and wisely allocating increased spending, we believe brands can weather the recession.
Prioritize marketing during a recession
You don’t have to search far to find data that shows how brands that increased their marketing spend during the recession compared to those that cut or eliminated it. Analytic Partners reports that his 60% of brands that increased their media spend during the last recession saw a better return on investment. Companies that spent more on paid advertising saw their sales increase by 17%.
As competitors make cuts, the marketing landscape changes, offering more real estate for advertising. Brands can take advantage of availability and low advertising costs to increase awareness. Maintaining market share of voice is much easier (and cheaper) than trying to win it back. Hear it from the Reckitt Benckiser marketing rep, The campaign was launched in the midst of the 2008 recession. “While most competitors reported a 10% or more decline in his earnings, Reckitt Benckiser actually increased revenue by 8% and profit by 14%. I just saw it as an investment.”
But simply increasing (or maintaining) your marketing budget during a downturn is not enough. Brands should use their marketing dollars wisely and allocate them to programs that deliver results. Here are four areas that prove ROI.
1. Brand building
This is especially important in the B2B world. There’s never been a better time to create and celebrate your brand purpose. A field normally dominated by B2C brands like Apple, last year’s FutureBrand Index (held every year PwC’s Top 100 Companies Based on Brand Perception) ranked four B2B brands in the top five. A continued focus on brand building supports long-term sales through ongoing awareness and recognition.
2. Customer retention and loyalty programs
Generating new business leads is always important for brand growth. But customer experience can play a big role in enhancing customer retention, another source of demand through cross-selling and upselling opportunities. As an added bonus, loyalty programs help build trust in your brand and create trustworthy customer data.
3. Digital transformation
Recession or not, digital transformation continues to grow steadily (and quickly). To meet the demands of B2B buyers, businesses must invest in e-commerce solutions, personalization, and a strong martech stack to engage buyers at every stage of the buying process.
4. Acquisition and retention of human resources
Finding and retaining talent is key to weathering a recession. Marketing can play a major role by using existing marketing channels and strategies to recruit and re-hire. Companies need to consider how best to engage with talent across channels, platforms and messaging. Marketing helps create campaigns that attract top talent. Once that talent is discovered, retaining that talent is supported by living the brand values and purpose at every stage of the employee journey.Training programs that provide upskilling and professional development to invest
The recession will end. Times may be uncertain, but we have weathered recessions before and even survived global pandemics. Requires investment in fund allocation. Done cautiously, business leaders can experience recessions as tailwinds rather than headwinds.
For future outlook by and about marketing agencies, visit the Agency Predictions hub.
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