How B2B Marketers can Create Opportunity During a Downturn
Economic Downturns are the Ultimate Stress-test of Your Marketing Strategy
The current recession will probably differ from anything we have experienced in the last century. It has arrived when businesses are still struggling to navigate the ongoing effects of a global pandemic. Where companies have to contend with inflation, supply chain constraints, a historic labour shortage, and geopolitical tensions in key markets.
In such an environment, it is no wonder companies might be tempted to cut extraneous programs to shore up more essential functions. The problem is that business leaders often perceive marketing programs as one such extraneous cost.
However, one need only look to past recessions to see that carelessly slashing marketing budgets does not work. It just makes businesses even more vulnerable during economic downturns. Instead, the CMO and C-suite should carefully evaluate marketing programs and focus spend on key areas of investment that drive results.
In business, it takes nerves of steel to stay in the game when everyone else is battening down. But with an agile strategy and steady hand, B2B marketing teams can help steer their brand through the storm intact.
Learning From Past Recessions
No two downturns are exactly alike. For example, the world has changed remarkably since the Great Recession of 2007-09. However, we can learn some important lessons from studies on previous recessions and the long-term impact different business decisions had on recovery.
What these studies have found is that recessions essentially dial things up to eleven. During downturns, companies typically experience more dramatic losses and gains than during stable periods. Yes, there are more risks of making mistakes, but recessions also present many unique opportunities.
Research also shows that getting a recession strategy wrong will make long-term recovery significantly more difficult. For example, companies that did not fare as well during past recessions typically took one of three approaches:
They assumed aggressive, indiscriminate cost-cutting would see them through the downturn. They let go of valuable talent and slashed sales and marketing activities that were key to growth.
They took a misguided ‘spray-and-pray’ approach. They blindly tried a bit of everything in a desperate bid for growth and ended up straying too far from their core.
They simply waited too long to act. Their lagging response during the downturn allowed more proactive competitors to seize a greater share of the market.
However, other companies performed materially better than the rest and proved resilient in the crisis's face. Multiple studies have found common characteristics that helped these companies thrive through downturns. For example, a McKinsey report examining the efficacy of different cost-reduction models during the Great Recession of 2007-2009 found that:
The best-performing companies focused on improving the balance sheet. They quickly divested themselves of underperforming elements going into the downturn and acquired early when coming out of the recession. They monitored opportunities to expand market share and snap up assets and talent shed when competitors mis-stepped.
Resilient companies also focused on improving margins through strategic cost-cutting. But rather than cutting across the board, they centred spending on serving and growing high-value segments.
Organisations that weren’t affected directly by the recession (e.g. oil and gas, health) continued to focus on growth even if it involved increasing costs.
We can also find evidence to support these findings in a Harvard Business Review paper, as well as a more recent analysis by Bain & Co.
We must also consider the way the landscape has changed. Technology now plays a much bigger role, challenging B2B companies to adapt to changing business environments. Both McKinsey and Bain found signs that companies further along the digital transformation journey fared better post 2007-09. It seems likely that this time around, fortune will favour organisations with digital discipline and advanced technologies even more.
How B2B Marketers Can Create Opportunity During Troubled Times
To successfully navigate the coming year, businesses need to adapt their sales and marketing strategies quickly to reflect the changing economic context. This entails thinking really carefully before they cut marketing budgets. It is important to balance short-term efforts to reduce costs with the need to maintain sales and implement long-term strategies.
Evidence suggests that companies that maintain (or even increase) their marketing investments can emerge from recessions in a much stronger position than rivals. This makes sense. It’s marketing’s role to focus on higher value segments of your customer base. Precisely the people you want to keep and attract during a downturn.
Your digital marketing strategy is part and parcel of your digital transformation journey. You need to invest in it along with other digital disciplines for strategic advantage and operational efficiency.
Leverage Your Role As a Communicator
Marketers are expert communicators, a vital skill that is needed when dealing with a crisis. Right now, partners, existing clients, and new prospects are looking for reassurance and guidance.
The CMO should work with leadership to solidify your company’s core response to the situation. Nothing destroys brand confidence faster than receiving a jumble of different, oft-time contradictory answers from the C-suite. (It makes the company seem unstable or unprepared.) Instead, businesses want to create a unified message for external and internal customers alike.
Besides helping craft the brand’s response, the sales and marketing teams play a key role in personalising and disseminating information. They have the tools, skills, and data resources to quickly and effectively connect with stakeholders, helping them stay abreast of important developments.
The CMO is also well-positioned to lead a cross-functional team to execute recession response plans. For example, preparing sales teams and customer service specialists for how to communicate the rationale for price adjustments to customers effectively.
Stay Focused on Your Customers
In B2B, the bulk of income generation depends on products/services purchased by existing clients. So it is even more important to invest in outstanding customer engagement during a recession.
B2B buyers will be even more aggressive in evaluating vendors, not only in terms of cost but also in relationship quality. Companies that try to preserve profit margins by slashing customer experience may find their clients leaving them for superior service elsewhere.
It is critical that you closely monitor the changing landscape your customers find themselves in over the next year–particularly for key accounts. Businesses across industry verticals will probably face multiple disruptions in their ways of working.
Your CX strategy should focus on understanding their struggles and being there as a supportive partner in these times. For example, offering more sophisticated pricing solutions during moments of truth, like contract renewals. The client’s specific situation, the cost to serve, historical performance, and their value to your business should inform your offer.
Keep on Top of Developing Advertising Opportunities
Many businesses are likely to cut advertising spend, so use this opportunity to build stronger advertising campaigns while there is less ‘noise’. Fewer companies bidding on high-demand keywords could mean a lower actual cost per click. This offers the opportunity for these savings to be used to optimise other parts of your campaign. For example, investing in high-quality ad creatives, responsive landing pages, etc. You can also take advantage of this period of reduced competition to further expand your brand reach in secondary industry verticals.
When designing ad campaigns, consider the context and use psychological segmentation to take the viewer’s emotional state into account. Many professionals are experiencing heightened levels of fear and stress because of the economic situation, which can influence their B2B purchase decisions.
Imagine the position of your target audience. Selecting the wrong vendor could have catastrophic consequences, depending on the shape of the recession.
Your ads should appeal to B2B buyers on both a logical and emotional level. Your goal is to make them feel confident that you are a partner who will serve them well during these difficult times.
Even though maintaining advertising may only produce modest results during a downturn, it could contribute substantially to long-term profits. You will have a far stronger presence than brands that only restart their ad programs at the end of the downturn.
Get More Out of Your Creative Budget
A marketing goal that is always worth pursuing, but is particularly relevant in a downturn, is repurposing your existing content. Leveraging existing assets will help you squeeze every bit of performance out of your creative budget over the coming year.
Find ways to repurpose content across different mediums. For example, use evergreen blog posts to flesh out email marketing campaigns. Transform recordings of a live presentation into a script for a podcast. Take high-quality visuals from sales material and use them for social media ads. Use a high-demand white paper/industry study as a lead magnet to support an online advertising campaign.
Invest in Your Digital Capabilities
An integrated marketing and sales automation platform is key for providing the omnichannel experience modern B2B buyers demand. It allows you to provide a self-led experience that engages potential customers on their terms. It ensures a smooth handoff from marketing to sales, where leads do not fall through the crack.
The time savings generated from marketing automation can be invested in building more sophisticated strategies (especially important during a recession). For example, gathering business intelligence for ABM programs that segment target accounts based on factors like competitive vulnerability and recessionary impact.
Strategically Outsource
During this economic downturn, marketing teams are facing contradictory pressures. On the one hand, reduced budgets may lead to a reduced head count. On the other, the skills you need to deploy for a successful marketing strategy are only increasing.
B2B digital marketing is complex. Each of your team members likely has to perform at least two—if not three—jobs. It can stretch your team thin when they’re trying to juggle:
Social media engagement
Data analysis and reporting
Internal and external communications
Overworked teams are often less effective (which leaves you vulnerable when the C-suite sharpens the budget axe).
And it’s not just about your team being overworked. It’s about being well-equipped to emerge from the downturn stronger. The future of work/digitisation/data/technological shifts already had CEOs worried about how they will make up the skills gap.
The answer is strategic outsourcing.
Outside specialists at a trusted digital marketing agency can provide flexible resource to fill either a skill or resource gap. You can task them with focusing on specific tasks or marketing channels, leading to better outcomes. Meanwhile, your internal marketing experts can focus more on the complex strategic and relationship-building activities that create value for your brand.
Build Out Your Data Collection Strategy
Having a robust data strategy is now more important than ever. Strong market research, data analysis, and interpretation capabilities are how you prove the value marketing creates. It allows you to understand your target market, run highly personalised campaigns, and identify opportunities to strengthen your brand position during a downturn. Building up your own data resources will increase your marketing resiliency by making your company less dependent on outside data services.
Confidently Face the Future With 1827 Marketing
As we have seen, companies that not only survived but thrived during past recessions took marketing seriously. They invested in their b2b marketing strategies, focused on customer experience, developed more sophisticated pricing models, and built resilient, automated operations.
This is exactly the type of work 1827 Marketing specialises in. We help businesses craft agile sales and marketing programs they can quickly adapt to seize emerging opportunities.
Reach out today to learn how we can help your brand successfully navigate the challenges of 2023.