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Are we in a recession? Is a recession going to happen? What is a recession, anyways?
I’m no economist, but I have been in business long enough to know that economic times are strange right now. Businesses are pulling back marketing budgets and laying off employees.
Let me be clear too. I don’t think a recession is coming to the United States. I think we are in strange economic times, but I don’t see the underlying instability that there was in 2008. I am also not an economist as stated above, so this is just my personal opinion.
While that can be wise if they were spending on unprofitable things to try to gain market share before and now they need to conserve cash, going too far can be equally as bad and leave you trying to catch up when things pick up.
I believe that right now, when things feel scary, is actually the best time to invest in your website, offers, funnels, and brand.
I believe this for four core reasons.
Your Competitors Are Scared
Look around you. Everyone is pulling back marketing budget. Every other day it seems we hear about a large company doing a layoff or planning to do a layoff.
People are scared.
You can be too, but don’t let that be an excuse to not invest in yourself and your business. The investments you make now will pay off months down the road.
If you are scared right alongside your competitors, then you’ll never pass them as you accelerate out of whatever economic downturn may come. You will be exactly where you are now.
But if you are able to invest even though you are scared, you’ll give yourself a chance to accelerate past them when the markets pick back up.
If They Buy In This Market, They’ll Buy In Any Market
Buyer psychology right now, with a potential recession looming, looks very similar to how it was in March 2020 when the Covid pandemic hit. Some companies and products (hello toilet paper!) couldn’t keep product in stock, while others (hello luxury clothing) basically went to zero.
But that doesn’t mean people aren’t buying at all.
If you are still seeing sales in this market, then it means you have something people want. If you can get more of them to come buy from you in this market, that means you’ve really hit upon something and can expect to accelerate out of any downturn.
If you’ve seen a decrease in leads or sales or whatever you use to measure your business, then it’s time to really dig into your offers and ask how you can adjust to either help even more people or make your current offer more valuable so more people choose you over your competitors.
This is how you accelerate out of a downturn.
Ads Are On Sale
One upside to people cutting marketing budgets is that ads are on sale! When we see an economic downturn and businesses pull back their marketing budgets, it frees up ad inventory. There are simply fewer businesses bidding up keywords and buying ad inventory, which leads to ads becoming cheaper.
I asked Joe Martinez from Paid Media Pros for his take on this, and he had this to say:
“Whether it’s been during COVID or during a recession, we have seen CPCs decrease due to less competition. From the Google side, we can also confirm in many accounts that competition has decreased by monitoring our Auction Insights. What has been the most beneficial part of leaving our ads on is the higher lift once business picks back up. Even if we still decreased budgets or changed to more affordable, higher-level traffic drivers like Display, we see the benefit of brand recognition later on when people begin searching again. We feel it’s okay to scale back budgets if you need to, but try not to go completely dark. You want to stay top of mind when people are ready to buy again.”
Because ads are cheaper, this means you should be able to get more clicks for the same amount of money than you were able to just a few months ago, and definitely cheaper than at the start of this year.
You do need to watch your conversion metrics of course, because even cheaper clicks can be unprofitable if even fewer people are buying.
But in general, cheaper ads is better for those who have been conserving cash and are able to invest ahead of the curve. By staying top of mind, you can accelerate out of the turn once the economy turns back up.
Are you seeing a trend yet??
You Have Extra Time On Your Hands
If business has slowed down, then you may have extra time on your hands. That extra time may be filled with anxiety and doom scrolling, but it is extra time nonetheless.
Use this extra time to work on projects that you’ve always said you’d get around to but never did because you were “so busy!” all the time before.
Take the extra time to invest in your brand, talk to customers (retention is a great strategy for business growth during tough economic times), and work on those infrastructure and important projects that you always put off.
Because you have extra time on your hands, you can also probably do more of the work in-house rather than hiring an outside provider. Of course, if you have cash and no experience doing what needs to be done, hiring an agency can be a great way to get it done quickly and cost-effectively.
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