How to Plan A Recession Marketing Strategy?

Earlier this year, I started studying about recession-proof marketing strategies, and what has historically worked over the years. My plan was to write a complete guide on the topic.

The topic was bigger than I initially thought and didn’t end up finishing the guide.

Luckily, I did not need to worry about a recession in 2023 … and this summer, I was seeing the signs of a failing economy internationally across many industries, but with a sliver of hope. I trully believed we would see a brighter 2024.

The U.S. saw a good growth rate for Q3 and growth of the total economy seemed good. But businesses across the world are struggling, and big companies, including big tech continue firing their workforces.

The following chart from Carta shows how many companies are closing down per quarter. Data seems to suggest that Series B startups are the worst hit.

Will we have a recession in early 2024?

This is a difficult call to make.

While the U.S. tries to achieve a soft landing, the European Union is struggling with Ireland, Finland, Austria, and Germany experiencing a drop in GDP growth for Q3 of 2023.

Data is still not available for Q4, but whatever happens the economy is still fragile. All it needs is a big industry getting hit for the whole house of cards crashing down into an international financial crisis again.

Increasing cost of leaving, reduced spend, and fear are not helping right now.

Signs, Investors, and Struggling to Grow

Investors and VCs push for profitability in their businesses. The new trend is to get away from “burning cash” and towards attributing every dollar to a result.

This is a hard pivot, not all companies are positioned to do it.

But, VCs want to see profitability so their startups will keep valuations. If you are not in the startup world, you might have noticed companies reducing unattributed spend budgets and doubling down on performance.

This shows a negative outlook in the market, where companies go into a “cutting spend” mindset.

Another sign are businesses cutting budgets & agencies losing clients.

While more positions with the role “Growth Marketing” are openning up. When companies do not see another way, they try to find the magical person that brings growth.

This is another sign of struggling for growth, and looking for a savior … making it ripe for snake-oil merchants to grab convince distressed CEOs to part with their money.

Recession Proof Your Company: Fixing the Product

Some things cannot change. You cannot change the financial situation of your customer, what you can change is your product.

The first two things you need to understand is:

• What is the financial situation of your customers (or ICPs)?
• Is your product an essential good, treat, postonable, or expendable?

Solutions

Then, what you can change is:

• The value of your product (discounts)
• The positioning of your product (what pain are you solving)
• The value your customers get from using your product (value-added usage)

Some businesses need to downsize to survice, others will need to reposition, and others cut costs …

Winners and Losers

Every recesssion is an opportunity.

Less healthy or adaptable businesses will not survive through it. Your first goal is to survive this environment for the foreseeable future.

BUT, there are the true winners, and they are found in two categories:

The opportunists: Those who find opportunities where others find disasters. You might need to have the resources and be in a good position to take advantage of this, but new products & businesses tend to show up and thrive in times of crisis.

The long-term players: While everyone is cutting down budgets, quality, and prices to “survive” the strongest players collect their competitors pieces and invest as much as possible.

Invest in the Long-Term

Do whatever is needed for survival, but the winners of the next crisis will not be the ones who merely survived.

The winners will be the ones who kept investing in their future.

• The ones who did not cut on quality,
• The ones who were building their brand,
• The ones who were building their channels.

Those who invest in their long term channels will see the highest rises when the economy recovers.

Brand will be the judge.

Your brand is your biggest asset. By focusing on discounting your product and reducing the quality you are hurting your brand as well.

Be very careful where and how you invest your resources in a recession. Keeping a strong brand positioning will help you after you reach “the other side”.

Plan your marketing strategy for a recession, with brand in mind, survival, and position yourself well to thrive in the upturn!