Marketing is rarely a walk in the park as it is, but marketing in a recession is basically a slow crawl. When times become economically challenging, customers start to tighten their budgets. Whether it’s a true recession or just a downturn, the same shoppers who typically indulged in their favorites or took a chance on new offerings get a lot more discerning about their purchases.
And when customers spend less, businesses feel it.
So, what’s a brand to do when it’s fighting for market share in an increasingly competitive landscape and trying to do more with an ever-shrinking marketing budget? Every customer counts and every interaction matters when it comes to winning and keeping customers.
According to the Qualtrics 2023 Global Consumer Trends report, 80% of customers say they would switch brands after a bad customer experience. That means the pressure’s on.
Marketing strategies in a recession
Recession marketing — or marketing in an economic downturn — requires some strategic thinking. During recessions businesses must defend market share for core inventory, introduce and grow new products, produce content efficiently, maximize the cost of ad impressions (CPM), and generally deliver more with less.
Defend market share for core products
Anticipation of a possible recession combined with rising costs has slowed consumer spending across demographics. Even spending among high-income consumers, who traditionally buck this trend, is down. With customers everywhere looking to get more bang for their buck, brands need to find ways to maintain their share of the market for their bestsellers and core inventory.
Create a frictionless shopping experience
For retailers, one of the strongest offensive plays is providing customers with a frictionless shopping experience. What does that entail? Make doing business with you as easy as possible. Essentially, customers should know exactly what to expect and shouldn’t encounter any obstacles or issues that require extra effort on their part.
96% of customers who had high-effort experiences were ready to switch brands, according to Gartner research, while just 9% of customers who had low-effort experiences considered swapping loyalties. Frictionless shopping experiences often mean meeting customers where they are. This could look like:
- Targeted product galleries on social media platforms and click-through purchasing
- Alternatively, visual galleries on product pages that pull content from social media mentions can show shoppers what your products look like with real customers
- And implementing a helpful Q&A feature on the product page where you and your loyal customers can answer questions from potential buyers still in the research phase of their purchase journey gives your audience the information they need when they need it
These types of user-generated content (UGC) — that is, product information and reviews, social imagery, or videos created by consumers rather than the brand — do a lot of heavy lifting for brands looking to minimize friction for shoppers.
Gigaset, the European market leader for cordless phones, adopted a UGC strategy, including questions and answers on its product pages, to great effect. The brand experienced a 70% lift in conversions within 15 months.
Since Gigaset’s products are complex, and customers typically do plenty of research prior to purchasing, making questions and answers available right on the product page cuts down on friction in the customer journey and increases customer confidence.
Reward loyal customers with extra value
When customers are pinching their pennies, a well-timed promotion or sale can sway shoppers to your brand. In a recent survey of Influenster members, 85% of respondents said that receiving buying incentives would help keep them loyal during times of inflation.
Giving customers a monetary reason, like a well-planned brand loyalty program, to stick with what they already know and love — your brand’s core products — can tip the scales in your direction.
Build and maintain growth for new products
Perhaps you’re less worried about the products that already sell well and more concerned with marketing new products in a recession, when customers are hesitant to spend money on an unknown quantity.
Launching something new can be nerve-racking, even in the best economy. Throw in the looming threat of a recession and you’ve got a potential disaster. Then again, with a couple of strategic plays, you could have a real winner on your hands.
Solicit reviews with targeted sampling
Without reviews on your product page, you’ve already lost a third of your customers. That’s how many consumers say they wouldn’t purchase a product that didn’t have any reviews. How do you get reviews for a product that hasn’t yet launched? Targeted product sampling.
A sampling program gets your new product in the hands of potential customers to try and use and — yes, that’s right — review. Sampling is an effective way to seek out UGC in order to help other customers discover a new product and feel confident purchasing it.
When Kraft Heinz was getting ready to introduce eight new flavors of salad dressing, the brand first launched three targeted sampling campaigns to seek out authentic feedback and drive awareness through UGC.
The campaigns garnered 2x the expected reviews and over 5x the program’s investment via earned media.
Listen to (and act on) customer feedback
When building an audience for a new product, it’s not enough to simply seek out customer feedback. All of those reviews, good and bad, are valuable insights into the viability of the product and your customers’ needs. Understanding the customer and acting on feedback can make the difference between an army of loyal customers and a collection of fair-weather spenders.
Unilever are no strangers to marketing in a recession. When the brand noticed a trend of customer complaints about a reformulated product, it discovered a link to a bad batch. The company reached out to affected customers, replaced the product, and educated the customers on the benefits of the new formula — a real lemons-to-lemonade situation.
But acting on feedback isn’t just about addressing complaints. Analyzing customer sentiment can also highlight opportunities for cross-promotion or marketing gaps. Unilever brand TRESemmé observed reviewers of its Keratin Smooth haircare line suggesting dry shampoo the next day to maintain results. Since TRESemmé didn’t have a dry shampoo in the Keratin Smooth line, the brand promoted and recommended dry shampoos from its other lines.
That results in a smoother (pun intended) shopping experience all around.
Embrace the power of positive (and negative) reviews
You believe in your products. You want everyone to love them. But in reality, negative reviews come with the territory. Critical reviews can be vital for improving products, discovering marketing gaps, and researching customer needs, but they also lend authenticity to your products.
Many shoppers think negative reviews are just as, if not more, important as positive reviews because, well, a product with nothing but 5-star ratings seems a bit suspicious. Critical reviews help customers get a more complete picture of whether a product will work for their needs. If you’re looking to build authentic trust and loyalty, embrace all reviews — the good and the not-so-good.
Deliver more with a smaller marketing budget
Customer budgets aren’t the only ones that shrink during a recession — marketing budgets are taking a hit, too. But that doesn’t mean stakeholders are satisfied with diminished results. So how do you deliver more with less? Leverage UGC, which more brands are starting to do.
When you’re working with limited resources, UGC is an efficient way to produce content — and it’s also preferred by customers. The majority of shoppers rely on UGC over branded content when deciding what or whether to buy. And UGC is especially effective for marketing in a recession.
One of the smartest ways to lend credibility to your brand, answer customer questions, and raise awareness of products, new and old, is to lean into the people using your products.
Petco experienced this firsthand. The pet care retailer saw a huge increase in organic search traffic, conversions, and revenue per visit from a sampling campaign aimed at generating brand awareness. The brand benefitted particularly well from buzzy reviews and social media posts at the start of holiday seasons — potential customers were able to see authentic, user-generated images from those who’d received the samples and get answers about seasonal products that they might have otherwise passed on.
Boost customer trust to better weather a recession
Marketing can be tricky to nail at the best of times. But marketing in a recession is a whole other level. As many brands implement new technology — everything from marketing automation to generative AI — into everyday operations, customers value authentic shopping experiences now more than ever.
The Qualtrics Global Consumer Trends report lists human connection as the top trend in 2023 to win customer loyalty, and building trust through UGC is an excellent method of connecting in that authentic way customers crave. As your community of brand loyalists grows, you’ll be prepared to weather any economic storms.
Want to learn more about maintaining customer loyalty? Watch our masterclass on how to maintain brand loyalty during tough economic times.