How to Market a Small Business in a Bad Economy

Economic trends can be predictable, in that what goes up, must come down… right?

But then if you look at the stock market over the past decades, it does always trend upwards as civilization continues to develop and improve compared to the decades prior.  So far, every financial advisor that I spoke with had a common theme – do not panic, leave things on course. While you can make some adjustments to reduce the loss and increase the gain, at the end of the day, things will go back up and over time and any losses will be erased.  What’s important is that you don’t let your emotions override your logic.

When it comes to marketing strategies for small businesses during a recession, the same rule applies.  When you’re entering into economic uncertainty, it is very easy for owners to think maybe I should conserve my cash. And yes you definitely should, by cutting out any expenses that you deem unnecessary. You should also be reevaluating your marketing approach and goals accordingly. 

But like the old saying goes – when times are uncertain, opportunity arises. If you are reading this article, chances are you are getting out of strong economic growth and expecting a little bit of uncertainty or downturn in the near future. During the strong economic growth, everyone pours money into marketing because they are trying to compete and grow – or at least you should…

When things are becoming uncertain, the first thing you will notice is that the big corporations and national brands, that typically spend millions every month to make sure their logo is visible everywhere, begin to reduce their budget. And this is followed by most regional companies doing the same in order to reduce their marketing budget.  For small business owners, this is your chance!

Let me explain why – typically, corporations like to increase their marketing budget when the economy is looking up, hence marketing costs go up. In layman’s terms, your bang for your buck goes down because you’re competing with them on essentially every level, from local to national branding (resulting in higher cost per click, or CPC).  But as they reduce their budget, you’re going to notice your cost per click going down and your impression share going up, with the same budget. Essentially giving you more bang for your buck!  And this is where your opportunity awaits.  With less competition in the marketplace, you can expect your ads budget to stretch further.

It’s recommended that you either maintain your marketing budget and if you can, increase your ad budget since you should be seeing better results per dollar.  Remember, for most industries, people still buy the products and services they like. Even in an economic downturn, they typically just shift priorities and focus.  And the market / industry does not dramatically change simply because of the stock market or other external factors – the changes are gradual and predictable. Therefore, given you have a little bit of “warchest”, this is time to continue what you’ve been doing and possibly even expand if you’re seeing signs of your marketing strategy working better than it was before.  Before you know it, the economic uncertainty can be replaced with an upward trend (big corporations will start opening up their large marketing wallets again too). Hopefully by then your business has a larger customer base, a bigger reach, and a stronger brand that you’ve built in past months to be able to compete better and even possibly win against the big corporations!