History has time and time again shown that recessions can offer incredible opportunities for business growth for brands that sustain their marketing activities and budgets. Here are seven of the top reasons why you need to keep your marketing budget if you want to grow beyond the economic downturn:
1) Marketing history repeating itself
Successful marketing is a process that requires consistency over time, and the best time to work on recession is before recession hits. Time and time again, history has proven that companies willing to invest in marketing enjoy accelerated growth. As the saying goes: “When times are good, you should advertise; when times are bad, you must advertise.”
In the recessions of 1981-82 and 1974-75, companies that continued to invest in advertising saw more growth than their competitors that shrunk or eliminated their budgets – and in 1981-82, that growth was a staggering 256%. In the 2008 recession, many businesses debated whether to trust the economy, and advertising expenditure dropped by 13%. Yet statistics showed 3.5 times more brand visibility for companies and organisations that maintained their marketing output.
2) Taking care of clients is taking care of your business
When the economy hits a slump, no one is exempt, and this is when you will need to depend on your current clients and fully appreciate their worth. Client retention is essential for the success of accounting firms, as the bulk of their income generation depends on services purchased by existing clients on a retainer.
One of your top strengths in a recession is a loyal client core; focusing your efforts on servicing existing clients offers five to 25 times more yield, with far less effort and expense than it takes to acquire new clients.
Regular communication strengthens your connection with clients as they encounter your genuine interest and care. And there are benefits to continuing with marketing to your existing clients during a financial crisis. Firstly, accounting firms must preserve clients’ trust in their ability to meet their needs, and this won’t happen if the company is perceived as unstable, projecting insecurities, or unprepared.
Secondly, as most accounting firms’ new clients often come from referrals, you want to boost the confidence of your existing clients to ensure they continue to introduce others to your business.
3) Consider what you are offering clients
When a recession hits, clients look at purchases more carefully, weighing up perceived value for money, often reviewing service bundle offerings and price models.
Businesses in product sales sectors will encourage purchasing with incentives such as extending product sales, coupons and interest-free credit. Accountancy firms can use other approaches, such as providing new services at a different price level. Marketers refer to this approach as introducing a ‘fighter product or brand’, where a cheaper version of the top-of-the-range product or service is sold under another name.
4) You can and should outsource your marketing
Marketing has become more complex over recent years, emphasising the demand for a more tailor-made approach and cross-media activities. Marketing strategies and actions have adapted and are now more multifaceted and varied, making it more difficult for accounting firms to win new clients.
The great resignation phenomenon and the financial downturn could mean that accounting firms struggle to source and retain skilled marketing workers in-house. Marketing outsourcing is the solution and now, like never before, accounting firms can outsource their marketing projects to professional marketing agencies and expert teams.
5) Focus on unimpacted industries
In times of economic crises, not all the markets or trade segments are affected equally or even adversely. In mitigating the seasons when your business is experiencing no growth or loss, your company can look towards the industries that remain unmoved by financial storms. Two industries worth looking into is healthcare, and the government industries, which recent history has shown remain obstinately almost recession-free.
6) Refresh your marketing strategy and plan
The after-effects of recession can influence client purchasing patterns long after the financial crisis has been resolved. Companies often make the assumption that it will be ‘business as usual’, with clients resuming their purchasing habits or behaving the same way they did during previous economic downturns.
As accounting firms could be at a disadvantage in analysing current and future trends, the opportunity can be used to review your market research and redo your marketing plan and strategy.
7) Get more out of your marketing budget
Recessions tend to require more from a business to succeed. Competitors that face financial hardships might lose their marketing focus, postpone projects, partially withdraw some activities, or be hindered in launching new services. This means your business will be left at an advantage, receiving extra visibility and, essentially, getting more done with less budget. With reduced media advertising costs (advertising expenditure dropped by 13% during the last recessions), marketers can now buy more advertising with less money.
Anna Stella is an award-winning marketing expert, academic researcher and CEO of global marketing outsourcing agency BBSA Marketing.
Hear a panel of guests dissect the latest headlines and provide expert analysis on the top stories from across the world of business, finance and accountancy.Find out more
Stay up to date
You can receive email update from ICAEW insights either daily, weekly or monthly, subscribe to whichever works for you.Sign up
News in brief
Read ICAEW's daily summary of accountancy news from across the mainstream media and broader financing sector.See more