It’s not time to panic—recessions actually bring plenty of opportunities if you choose to redistribute rather than cut back.
In a recession, we all want to minimize the risk of losing revenue. You might currently be considering how best to cut expenses and maximize income if the market slows. Cutting marketing often feels like the simplest option, and in the short term it usually protects your cash flow. But if you’ve experienced downturns before, you know that slashing marketing only provides short-term relief—instead, you should think about reallocating your marketing budget. Because during a recession, new opportunities arise.
I was there during the 2008/2009 financial crisis when I worked with online car rentals. I argued to keep my marketing budget because I could show that an online booking was much cheaper than having customers call the call center. When COVID hit and I was asked to cut ALL marketing spend for an IT company, I argued that Google Ads and search engine optimization (SEO) were essential for prospects and customers to find us—otherwise, we wouldn’t stand a chance in the brutal competition as the world shut down and everyone had to go digital.
I believe you should always keep a close eye on your marketing budget to get as much value as possible, but in times like these it becomes even more important to think carefully about WHAT the money is spent on and to consider your own timeframe—how much financial stamina do I have?
Think about it this way: most of your competitors are thinking the same as you, which opens a window of opportunity for those willing to invest in the “right” marketing channels while others pause their efforts.
Here are some tips I think you should consider:
It costs to acquire new customers
Finding new customers is expensive. It’s often said that acquiring a new customer costs five times more than keeping an existing one. You already know that ad spend for customer acquisition is far higher than the cost of retention, so think about what activities you can implement to keep your customers from leaving during a recession:
– First, identify your biggest and most loyal customers—how often do they buy and what is their average order value? How could you encourage them to buy a little more or a little more often?
– Once you’ve identified your loyal customers, how can you get them to recommend you? Ask them to leave a review or maybe offer a discount if they refer friends. Think about how you can manage these customers with a more personalized marketing approach.
If the channel converts, it’s still the right one
Balance your marketing budget and focus it on the channels that drive conversions and sales in the short term. If you know high-quality leads are coming from Google Ads, for example, then it’s worth maintaining spend there if you can. Just make sure your cost per lead doesn’t spiral out of control. You can also focus on search terms closer to purchase intent, rather than broad informational queries. For example, there’s a big difference between “tourist attractions in Madrid” and “cheap trips to Madrid.”
When it comes to SEO, it’s crucial that prospects can find you when they’re ready to buy. Even here, you might want to focus on bestsellers or high-margin products to maximize value both now and in the long term. Building trust and authority in Google’s eyes will pay off after the recession, but compared to other measures it can take longer. That just means you’ll be in a much stronger position when customers’ purchasing power returns.
Customers demand (at least) as much entertainment
Even if you’re feeling nervous about a tough sales period ahead, your customers still want to be entertained and enjoy a great experience. Think about what you can create, with simple means, to keep your brand top of mind. Maybe it’s an educational Instagram short about your best-selling product, a fun TikTok dance with your warehouse team, or a YouTube series of five short episodes in your biggest category. Being present in customers’ feeds is never wrong, and if they’re entertained, the chances are higher they’ll remember you when it’s time to shop.
Take the opportunity to fix what you’ve postponed
Finally, if you, like many e-commerce businesses, have been in constant growth mode and haven’t had time to review your tech stack, now might be the moment. Technology evolves fast—maybe you’ve accumulated tools that need upgrading or better integration. Or perhaps there’s new tech you haven’t had the chance to explore yet. Now might be the right time!
To sum up: don’t panic if your sales take a dip—reallocate your marketing budget toward activities that drive short-term conversions. With tight monitoring of leads and quick learning about where to find business opportunities, you stand a better chance of surviving the recession than your competitors.
Sources:
https://hbr.org/2020/08/dont-cut-your-marketing-budget-in-a-recession
https://www.outboundengine.com/blog/customer-retention-marketing-vs-customer-acquisition-marketing
https://www.adweek.com/partner-articles/how-marketing-leaders-can-prepare-for-a-recession
Hanna