Marketing costs are amongst the first expenses to get slashed. It’s easier than other ways of cost cutting. But it’s sort of like selling your tires to protect your car…You won’t be able to move though your car will exist.
But there has been a reset – your customers are not in the same position as pre-COVID and nor are you. The best way to cut costs is to be laser-focused – reach out to the clients most likely to buy with the offerings most likely to be acceptable, and ruthlessly cut spend on everything else. If your organization needs cash flow, focus on short-term wins for survival rather than longer term brand investments.
Your marketing response depends on what type of product you sell and its COVID Context, and Recession Relevance. It also depends on the psychographics and financial health of your clients and customers.
The context of this article is B2B but you can adapt it for B2C.
First off, map your product lines and services into the appropriate quadrants. Look at historical data if you have it of what worked in the past downturn.
Here’s what companies (and individuals) broadly look for in a recession.
- Cut costs in general
- Postpone cash outflow
- Increase short term revenue
- Decrease fixed costs
- Reduce cost of sales
COVID adds some more behaviours to this. These will remain in force until either a vaccine is found or at least 3 years of non-recurrence:
Avoid personal contact
Derisking dependence on travel & transportation
Derisking the need for large groups in close proximity
Building up immunity – short term & long term
To help you plot your offerings into the appropriate quadrants, here’s a table where you can check its Covid Context and Recession Relevance. You can modify or reframe offerings to make them more relevant now. You can also create new products that are more relevant for the New Normal.
|Attribute||Offering A||Offering B||Offering C|
|Postpone cash outflow|
|Increases short term revenue|
|Decrease fixed costs|
|Reduce cost of sales|
|Avoid personal contact|
|Derisking dependence on travel & transportation|
|Derisking the need for large groups in close proximity|
Based on this map your products and service lines into the quadrants.
Next, map your top clients, those who contribute 80% of your revenue on their financial status.
Now map your offerings to this quadrant and you can personalise each offering for the key customers. You will also need to have a differentiated pricing and credit strategy for buyers in each quadrant based on your reading.
From the product assessment quadrant, the offerings in Quadrant 1 & 2 should be marketed to everyone. But products in quadrants 3 & 4 which might see lower off-take in a downturn can still be relevant to those in Expansion Mode and the Careful Optimists.
One size never fits all, but in a downturn careful selection and crafting of clients can save you loads of marketing expense and perhaps help with survival.
You can use this handy template to map your portfolio.
If you’d like to bounce off your maps with me, send them in confidence to firstname.lastname@example.org