Making Bank During Hard Times
Making Bank During Hard Times: Why Investing in Marketing and Sales is a No-Brainer
In times of financial uncertainty, investing in marketing and sales can be a strategic move to maintain revenue, gain market share, strengthen customer relationships, and achieve long-term benefits. By focusing on high-impact initiatives such as digital marketing, content marketing, customer retention, new market development, and influencer marketing, businesses can maximize their return on investment and achieve their goals even in challenging times. Examples like Amazon, McDonald's, and Walmart demonstrate how companies can gain a competitive advantage and increase market share by investing in marketing and sales during economic downturns. The key is to focus on programs with the most impact and carefully track results to ensure a positive return on investment.
And yet again, we’re facing financial uncertainty in the U.S. Banks are failing while inflation may be under control but with a possible recession looming. Meanwhile, the job market is strong in some sectors (leisure and hospitality) during a period when goods production has slowed. I think we can agree that it’s a challenging time as it relates to our country’s financial situation.
With all this uncertainty, there’s never been a better time to invest in marketing and sales. Although it may be tempting to cut budgets in an effort to reduce costs, doing so could actually hurt your business in the long run.
There are numerous reasons why investing in marketing and sales during tough economic times can prove to be a prudent decision.
- Secure Your Core Revenue Streams: During challenging financial times, many businesses struggle to maintain their revenue streams. By investing in marketing and sales, you can help ensure that your company continues to generate revenue and stay afloat during tough economic times.
- Grow Faster Than Your Competitors: When competitors are cutting back on their efforts, investing in marketing and sales can help you gain market share. With less competition, you may be able to secure new customers and increase your market share, which can pay off in the long run.
- Doubling Down On Retention: During challenging times, customers may be more cautious with their spending. Investing in marketing and sales allows you to focus on building stronger relationships with existing customers. By demonstrating your value and commitment to your customers, you can increase customer loyalty and retention.
- Invest In New Opportunities: Investing in marketing and sales during challenging times can also provide long-term benefits. By continuing to engage with customers and prospects, you can position yourself as a trusted partner and thought leader in your industry. This can help you attract new business and strengthen your brand reputation over time.
By investing in marketing and sales during tough economic times, you may be able to gain a competitive advantage and capture market share from competitors who aren’t.
Invest in Strategic Initiatives
With that being said, it’s important to be strategic in investing dependent upon your business goals and target audience. By focusing on high-impact initiatives, you can maximize your return on investment and achieve your business goals even in challenging times.
While there’s no “silver bullet” or a single solution to ensure continued revenue growth and a return on investment, the following are some ideas as to how to strategically invest in marketing:
- Digital marketing: With more people spending time online, digital marketing channels such as social media, email marketing and search engine optimization (SEO) combined with paid search can be an efficient way to reach your target audience and generate leads for the Sales team to close. B2B buyers are 57-70% through their buying process before contacting a salesperson. As relates to B2C, 81% of retail shoppers conduct online research before buying. Needless to say, it makes sense to insert your value proposition to affect the online buying process.
- Content marketing: Content marketing is important because it assumes and responds to your audience’s questions while helping to improve conversions and generate leads. In addition, creating high-quality, relevant content that addresses your customers' needs and pain points can help to build trust and establish your brand as a thought leader in your industry. In fact, the more consistent, high-quality content you produce, the quicker your SEO efforts will improve.
- Customer retention: Investing in programs that encourage retention can help to improve the Customer Lifetime Value (CLV), which positively impacts overall revenue. Research shows that a 5% increase in customer retention can generate up to 125% in Successful retention marketing involves building a two-way and engaging relationship with your customers. Start with personalization including personalized messages derived from knowing and understanding your customer’s buying habits. And as always, ensure that your product is delivering value with less reliance on discounts.
- New market development: Introducing existing products to new markets is a growth strategy that can reap future benefits. Through market development, your products or services can reach a wider audience of potential customers by expanding your reach to new verticals or segments, or new geographies. Expanding to new markets has intrinsic value beyond merely growing revenue but also by attracting and retaining talent.
- Influencer marketing: Influencer marketing involves partnering with individuals who have a large following on social media, blogs, or other digital platforms, to promote a brand, product or service to their audience. These individuals typically have a significant impact on the purchasing decisions of their followers. By leveraging the trust and authority of influencers, a company can engage with their target audience in an authentic way and improve their brand or product awareness in a crowded digital marketplace.
Examples of Investing in Marketing/Sales to Gain Market Share
There are a couple of examples that gained market share by investing in marketing and sales during an economic downturn. These examples demonstrate how companies that are able to invest in marketing and sales during times of economic uncertainty can gain an edge over their competitors and increase their market share.
- Amazon - During the recession in 2008, Amazon increased its advertising spending by over 40% and continued to invest heavily in expanding its product offerings and improving its customer experience. As a result, Amazon was able to capture market share from its competitors who were cutting back on marketing and advertising spend, as well as from brick-and-mortar retailers who were struggling in the economic climate. In fact, Amazon's sales grew by over 28% in 2008, while many other retailers were experiencing declines in sales.
- McDonald's: During the 2008 financial crisis, McDonald's invested in marketing campaigns that emphasized the value of its menu items, such as the dollar menu. By promoting affordable food options and increasing its advertising spend, McDonald's was able to increase market share and outperform competitors.
- Walmart: During the 1990-1991 recession, Walmart invested heavily in marketing campaigns that emphasized its low prices and value proposition. The company also expanded its product offerings and opened new stores in strategic locations. These efforts helped Walmart gain market share and solidified its position as a leader in the retail industry.
By emphasizing value, promoting their brand effectively, and adapting to changing consumer needs, companies can emerge from inflation or recession with a stronger market position.
Investing in Challenging Financial Times
So, whether the U.S. market is sliding into recession or not, there’s an argument to be made to invest in marketing and sales. Remember, the key is to focus on programs that are likely to have the most impact on your business and to carefully track your results to ensure that you're getting a positive return on investment.
Because investing in marketing and sales during challenging financial times can help your business survive, gain market share, strengthen customer relationships and build loyalty to provide long-term benefits.
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Sources:
https://www.ft.com/content/f789eed9-cb22-46f6-a9ad-dd450e999179
https://www.wbresearch.com/relationship-between-b2b-buying-content-sales-changed-insights
https://www.retentionscience.com/blog/retention-marketing-strategies/
https://www.wbresearch.com/relationship-between-b2b-buying-content-sales-changed-insights