This post originally appeared on Forbes.
Financial experts and forecasters speculate that another recession is on the horizon. Whether this downturn will eclipse the Great Recession of 2008-2009 is yet to be determined, but there’s no denying the impact will be felt far and wide across the business world.
As one of the first to suffer from reduced budgets during downturns, the role of marketing will invariably shift over the coming months and years.
However, to succeed, businesses shouldn’t blindly cut budgets or halt marketing spend altogether but rather reevaluate and rechannel spend into more strategic areas of the business.
That’s why, as a founder of a marketing agency, I believe marketers should approach whatever they do in difficult times from the point of empathy. It may come across as tone-deaf if marketers persist in positioning their product or service in the same way as before the pandemic, for example.
Discretionary Vs. Essential: How Marketing Prep Will Differ
So, how should marketers prepare for the onset of another economic downturn? First off, assume the recession is already here. It’s a tried and tested mindset: Be proactive rather than reactive.
Run simulations, investigate how your customer is going to be impacted by the upcoming recession, and analyze where your product or service sits on their hierarchy of needs. For example, will they engage more with you during difficult times, or does your product represent a discretionary spend they’ll likely cut?
For example, I predict bargain basement stores—or brands synonymous with discount goods—will likely experience a huge surge as people shop around for cheaper deals on essentials such as food and clothing.
Such companies expecting a boom still face challenges. They need to analyze how they spread their marketing spend, but the trick is increasing spend in the right areas, such as strategic advertising placements to position messages in front of the consumer’s mind.
On the other end of the scale, companies in the luxury goods market—I’m talking anything from jewelry and eating out to streaming services and vacations—may suffer a bigger hit as people tighten their purse strings.
Marketing teams at these companies will face a different set of challenges. They must squeeze value out of every last marketing dollar. This could be alternative pricing, acquisition models or reinvesting from paid acquisition to organic or referral.
I expect consumer subscription brands and B2B SaaS companies to bolster value with retention plays. For example, companies offer customers different plans that allow more flexibility when it comes to pausing their subscription or allow different packages with limited features but at a lower cost.
Netflix, for example, recently announced a cheaper subscription tier for viewers and will mitigate the shortfall in cash through advertising income. The popular streaming service is likely to introduce a more affordable option for its audience in the hope that cheaper pricing will encourage viewers to retain their Netflix subscription while cutting their rivals. With the sheer amount of streaming services on the market, I believe online subscriptions will be one of the first luxuries that many consumers purge, but it’s doubtful people will cut every streaming service from their lives.
Another method is to analyze the churn rate, identifying when a customer is likely to halt their subscription. Near the projected point of attrition, companies can then offer exclusive deals to carry on their subscription through the tough times (i.e., 12 months for the price of 8).
This approach will work especially well in B2B, where continuity and trust are key tenets of a successful long-term relationship.
Empathy Evangelists: Marketing’s Role As Voice Of The Customer
Ultimately, it’s down to marketing to determine how the above is communicated, which is just as critical as the act of deciding which proactive pricing changes to make in the first place. After all, marketing holds a unique position within the business as the voice of the customer. As such, it’s marketing’s responsibility to ensure empathy for the customer is present across the entire organization.
There’s nothing worse than a customer receiving marketing content—be it emails or social media posts—that displays empathy and understanding for their current situation, only for a sales colleague to follow up with disconnected messages lacking the same empathy or compassion.
What’s more, this mindset can (and should) span every department. Consider using marketing to assist HR in training employees to engage customers with more empathy or helping finance teams communicate the sensitivity of updated payment terms to recurring customers.
Practice What You Preach: Importance Of Internal Comms
What many of us also forget is how important marketing becomes when representing the brand and communicating internally. Remember, your employees are people, too—they share the same fears and concerns as your customers. If you’re preaching empathy and understanding to your customers, then it’s essential you practice the same humanity in your own house.
As a CEO or leadership team, this same lens must be applied to your own people, whether that’s through better accessibility to company data or transparency concerning the financial stability of the company.
People aren’t stupid—they know their jobs are intrinsically tied to the fortunes of the business, so consider introducing more regular company-wide meetings that address your runway, the milestones the organization needs to hit, or if you can, introduce salary adjustments that help alleviate the ramifications of pending inflation.
By proxy, it’s easier to treat customers with empathy if it’s a value that’s already embedded across the company in the way its people are treated. It’s easy to see why internal comms will only continue to ramp up in terms of importance over the coming months, and marketing will play a critical role here.