7 Strategies for Marketing in a Recession: Small Business Tips

Long-term profit growth is a gradual, uneven process. Contractions, downturns, and even full-blown recessions are inevitable, so getting ready for the bad times during the good ones is key to business stability. 

“Whether we are or aren’t in a recession, thinking about it or starting to think about it is probably a good idea,” says Melissa Cabral, head of strategy at Sid Lee USA, a full-service advertising agency. “You need to have some sense of preparation.”

Recession-proofing involves monitoring recession risk, building reserves, and contingency planning for critical operations—including marketing. Here’s what business leaders need to know about recession marketing efforts, plus tips to help you navigate economic uncertainty and target long-term business growth.

What is a recession?

A recession is a severe type of economic contraction. Typically speaking, recessions are downturns involving at least two consecutive quarters of declining GDP. 

Here’s a quick clarification of commonly used terms: 

• Economic slowdown. GDP continues to grow, but at a slower rate than in previous periods.

• Economic contraction. A period where GDP falls and the economy shrinks.

• Recession. An economic downturn, typically described as having at least two consecutive quarters of declining GDP.

• Economic downturn. A broad term that can mean recession, contraction, or slowdown, depending on the context.

Recessions put more sustained pressure on businesses and consumers than slowdowns and shorter downturns, and they can be more damaging as a result. A full-blown recession occurs roughly once every 6.5 years in the US, and most recessions within the past 50 years have lasted less than 12 months. 

How does a recession affect businesses?

Recessions decrease market demand, which makes it harder to attract and convert customers. This can also create a feedback loop that increases the severity and duration of a recession. Here’s how it works:

1. Consumer demand for goods and services decreases, causing a decline in business profits.

2. Businesses reduce spending. Many cut marketing budgets, and some resort to layoffs.

3. Layoffs (and the fear of them) further decrease consumer demand.

4. Businesses lose more money and respond with additional cuts.

5. Consumers become increasingly difficult to persuade into a purchase, and marketers face a more challenging task with limited resources.

Challenges of marketing in a recession

Recession dynamics are challenging for businesses and consumers—and they can be particularly tricky for marketing teams. Here are three challenges of marketing in a recession:

1. Decreased marketing budgets

Many businesses reduce spending during recessions, and marketing budgets are a popular target. “I’ve experienced this personally,” says Melissa. “There’s a downturn or a company doesn’t hit its numbers, or it’s concerned about future sales, and marketing is always one of the first things to get cut.” Smaller budgets force teams to scale back, reducing marketing spend and limiting their abilities to respond to changing conditions. 

2. Changing consumer behavior

Effective marketing strategies require accurate audience intelligence, and marketing teams invest in market research to understand target customer needs, preferences, and behaviors. The problem is that research findings reflect market conditions, and conditions change quickly during recessions. In such periods, marketing teams face the challenge of meeting emerging needs without the benefit of updated intelligence.

3. Decreased ROI on marketing spend

There’s a strong business case for maintaining marketing spend during a downturn (more on that shortly). The temptation to cut marketing budgets is reinforced by the fact that the return on investment (ROI) on marketing spending drops during a recession. Attracting and converting customers becomes more difficult, and marketers often spend more with less to show for their efforts. 

7 strategies for marketing in a recession

1. Clarify strategic direction
2. Focus on brand-building
3. Maintain stability
4. Meet the moment
5. Appreciate existing customers
6. Optimize your marketing channel mix
7. Learn from past recessions

The cardinal rule of recession marketing is keep going. Your marketing strategy might change, but you can’t stop trying to connect with customers.

“There’s a lot of evidence that suggests you should just keep trying to maintain relevance,” says Melissa. “The brands that continued to market through the last recession came out stronger when the recession ended because they were still top of mind for people.”

This doesn’t necessarily mean your business needs to go into debt to keep marketing, but it likely does mean sacrificing short-term profitability to target long-term profit growth. It requires you to rethink what your customers need, how you reach them, and how you’ll define success. These recession marketing strategies can help you optimize your efforts in stressful times:

1. Clarify strategic direction

Recessions are stressful. Conditions change quickly, and fears of a prolonged or worsening slump can complicate decision-making. Clear leadership, vision, and direction are critical in times of crisis. “It helps to have a clear leader, a singular point of view that you are trying to communicate, and very clear internal decision-making during a recession,” Melissa says. 

To prepare, solidify your internal leadership structure and decision-making processes before a recession strikes. Melissa encourages returning to your strategic objectives and answering the following questions: 

• What are you trying to accomplish?

• Who are you trying to target? 

• What do you want them to know about your brand? 

• What is so special about the thing you’re trying to sell?

• Why should anybody care?

2. Focus on brand-building 

Melissa emphasizes the importance of continuing to build your brand during a crisis. “Whether it’s boom time or a recession, you still have to try and find a way to connect with people if you want to be a strong brand,” she says.

She recommends brand-building over marketing tactics focused on more immediate goals, like driving sales. “There are a ton of ways to just keep hawking products, but then you’ll go out of favor as soon as people’s tastes change,” she says. Focus on brand awareness, customer satisfaction, and annual market share growth over short-term revenue increases. 

Best practices for brand maintenance include:

• Building community. Connect with loyal and potential customers alike via social media comments, direct messages, forums, and email newsletters.

• Prioritizing the customer experience. All the little moments someone has with your brand—from reading product descriptions to checking an order status—add up to their overall impression of you. Make it count. 

• Staying consistent. Consumers will have a hard time recognizing and remembering you if your brand tone changes drastically from post to post or the narrative about your brand’s purpose isn’t clear. Dial in on your core values and share them consistently.

3. Maintain stability

Melissa cautions marketers to maintain brand stability. “Know what is and isn’t negotiable,” she says. “At what point are you compromising too much? What are the aspects of your brand or business that could go away, and your brand would be good?”

Setting parameters can help you evolve to meet changing consumer needs. “Having a sense of what’s on brand and off brand helps you be flexible in crisis moments,” she says.

Melissa points to Nike’s recent pandemic campaigns as one example of effective brand-building during a downturn. “Nike had a whole ad campaign around achieving personal growth through sport under the pandemic’s unique circumstances,” she says. It was a positive message that answered emerging audience needs while also reinforcing the company’s existing brand identity. 

“They weren’t necessarily selling a product,” she says. “You have a brand that already is known for something, and just trying to have an encouraging message during that time.”

4. Meet the moment

A steep drop in GDP and total market cap can make it feel like everything is different—and for some consumers, it really is. Your customers may be newly unemployed, afraid of becoming so, or working overtime to pick up slack on a smaller team. 

Effective recession marketing responds to this new reality. You’ll want to adjust your messaging and strategy to give customers what they need in the new market. Melissa brought up how businesses responded to the 2008 financial crisis as evidence. “The brands that tried to do and say things to acknowledge that period in time outperformed others,” she says. 

The Hyundai Assurance Program, which allowed customers who were laid off to return newly purchased cars, is one standout example. “They were able to attract a lot of new customers by saying, ‘If you buy a Hyundai and you lose your job, you can return to Hyundai, no problem,’” Melissa says. “It got them a lot of PR, and it was also just a nice human move that helped shape perceptions of the brand.” The program helped the company increase market share and boost revenue during the worst years of the crisis.

5. Appreciate existing customers

A recession can mean tough choices for businesses and for their audiences. Loyal customers may be making sacrifices because they believe in your brand, and Melissa stresses the importance of showing appreciation. “Focus on expressing gratitude to the people and customers who are sticking with you or have been with you for a while,” says Mel. “I think that’s a moment to just acknowledge that they could go anywhere, but they decided to stay with you.” 

Common customer appreciation tactics include sending thank you notes, holding customer appreciation events, offering rewards or loyalty programs, and investing in strategies to improve your customer experience. Showing your appreciation can also help you build relationships, and Melissa recommends adjusting messaging to demonstrate your understanding of audience needs. 

“Try to have some kind of empathy for customers or potential customers,” says Mel. “Be mindful and self-aware of the moment that you are in, and adjust the tonality appropriately. It’s time to be more human.”

6. Optimize your marketing channel mix

Budget cuts can be unavoidable. To make tough choices, Melissa advises returning to your strategic vision and focusing only on the activities that matter for where you’re trying to take your business. “If you’re a local brand, you don’t have to worry about national stuff,” she says. “If you are trying to reach out to customers, make sure that your CRM is on lock, get your community engaged on your social channels, and maybe run Q&As or polls. It all goes back to your objectives and what you are trying to do.”

To choose between equally effective channels, Melissa suggests considering historical ROI, but don’t let these concerns become more important than your goals. Instead, identify your current state and ideal state, and outline the process for closing that gap. 

Then, choose the most effective channels to enact that strategy. For example, say your digital advertising spend demonstrates your highest ROI, but your current priority is protecting market share by retaining existing customers. In that case, you might prioritize engaging with loyal followers via social media and email marketing over advertising budgets that target the top of your marketing funnel. 

7. Learn from past recessions

The cyclical nature of market contractions is a unique aspect of recession-proofing. “The thing about recessions is that we have a framework from them,” Melissa says. Every recession is different; you can use data from previous recessions and downturns to see how businesses like yours have historically fared under various circumstances and use this information to plan.

You might aim to have enough cash on hand to offset something like a 20% decrease in revenue for 12 months without budget cuts, for example. Or you might study how media consumption patterns and spending habits changed in your industry during the most recent slowdown. With that historical knowledge, you can optimize your channel mix accordingly.