Managing Marketing During a Downturn: 7 Fundamental Rules

Date: 2023-05-25 | Time of reading: 8 minutes (1487 words)

Managing Marketing During a Downturn: 7 Fundamental Rules

The business world is constantly in flux: conditions change, exchange rates fluctuate, and the political situation shifts. The economic system itself is cyclical, with periods of growth periodically giving way to recession, resulting in decreased production levels and reduced income.

Businesses must react to these changes in order to stay afloat. During times of crisis, companies often cut their marketing budgets, but the effectiveness of such actions is questionable.

Let's examine how to manage marketing during a downturn to maintain a steady flow of customers and high sales levels.

7 rules for dealing with marketing during a slump

In any crisis, the main task of marketers is to continue taking action and exploring new opportunities. To begin with, conduct a comprehensive audit of your current strategy, communication channels, advertising campaigns, marketing tools, and so on. Then, follow the rules of crisis marketing.

Do not cut advertising budgets

Reducing marketing expenses may seem like a logical step during a downturn. However, this approach is flawed. If you reduce or completely eliminate advertising expenses, lead generation will come to a halt. Existing customers may continue making purchases. But if they leave due to the crisis (income reductions or other reasons), it will be difficult to replace them without advertising.

Restarting marketing campaigns after a break can also be challenging. When a brand stops advertising, competitors quickly capture the audience's attention.

Moreover, cutting back on marketing will lead to even greater uncertainty. When advertising consistently works, a business can forecast sales volume and revenue. If marketing campaigns are turned off, it becomes impossible to predict how many customers will make purchases in the next month. Therefore, consistent promotion is the path to maintaining a stable market position.

Eliminate non-performing marketing channels

If you still need to reduce your advertising budget, analyze the effectiveness of customer acquisition channels. Keep and strengthen (with budget and content) the ones that bring in quality leads and revenue. Stop funding or minimize expenses on channels that generate few customers but come at a high cost.

If your company uses omnichannel marketing, pay attention to attribution models. A detailed analysis of the channels will indicate which ones have a greater impact on conversions. It's worth investing money and directing marketers' efforts there.

For example, if you allocate budgets to contextual advertising but it only brings in 5% of customers with low average order value, while social media targeted advertising brings in 45% of customers, it would be logical to strengthen targeted advertising and possibly pause contextual advertising during the crisis.

Work with existing customers

During a crisis, loyal customers who are committed to your brand become the backbone of your business. Analyze customer lifetime value (LTV) and identify customers who bring in higher profits. Focus on retaining them by incorporating special purchase conditions and loyalty programs into your marketing strategy. If lowering prices and offering significant discounts is not feasible, allocate resources to communication and building strong relationships with your audience.

It's important for a brand to remind itself and pay attention to customer needs. Choose marketing channels that are convenient for them and provide personalized product recommendations based on their interests and previous purchases.

Use omnichannel marketing. Send email newsletters to customers to congratulate them on holidays, use push notifications to update them on deliveries, send SMS messages or messages through messaging apps to inform them about ongoing promotions, and so on.

An example of a greeting email newsletter for the customersAn example of a greeting email newsletter for the customers

Customers should feel cared for and receive information in a timely manner. In return, loyalty, consistent revenue, and resilience during a downturn await you.

Seeking new directions and audiences

It may seem that a crisis is not the time to launch something new, but that's not the case. It is precisely in challenging conditions that you should "look" in a different direction and find audiences that your brand has not yet reached.

Conduct research and analyze customer data and their orders collected by your CDP. There may be customers who have approached you but did not make a purchase because they were not informed about the benefits and value of the product. These people are a "warm" audience that was ready to buy but was not properly addressed.

Review your advertising campaigns, product descriptions, and content to meet the needs of such an audience.

Suppose, you sell a food photography course, but it’s only for beginners. Then professional photographers may have approached you, who are interested in the topic but don't need the basics you provide in the course. By creating similar training for advanced photographers, there is a chance to attract a new audience.

The needs of existing customers can also change during a crisis. Therefore, companies need to constantly analyze the moods of their audience and adapt accordingly.

For example, if design and uniqueness were particularly important to customers of a furniture store in the past, now the focus may be on practicality and durability. During a crisis, people tend to save money and are not willing to buy new furniture in a couple of years. The new marketing campaign should reflect such a demand.

How else to find a new audience:

  • Explore potential customers in other cities and even countries, especially if you have an online product that is not location-dependent.

  • Win back "inactive" customers who have stopped buying from you. For example, send a series of reactivation emails through email marketing services. Remind them about your brand or make a special offer that motivates customers to come back.

An example of a reactivation email from H&MAn example of a reactivation email from H&M

Change positioning

Shifting your brand to a different price segment or simply reevaluating your values and unique selling propositions (USPs) is one way for a company to maintain stable positions and even soar. A new direction may prove to be more in demand.

During an economic downturn, people become more frugal and try to spend less money on non-essential items. They also scrutinize the utility of your product in detail. Sometimes companies need to change their price segment to align with new customer needs.

Luxury brands suffer the most during a crisis. The audience's focus shifts towards real value rather than prestige, making it more challenging to sell luxury products. In such cases, repositioning your brand to a more budget-friendly segment can help maintain sales and even expand your audience.

Maintain prices

Price increases are a common occurrence during any crisis. However, people still react negatively to it and perceive businesses as taking advantage of the situation and profiting from customers. Try not to immediately raise prices, but instead find alternative solutions, such as reducing bonuses in loyalty programs or decreasing discounts. When prices change abruptly, some customers may simply leave in search of a more favorable offer.

If price increases are inevitable, try to implement them gradually and justify why they are happening. A proper marketing campaign can explain that prices are influenced by rising costs, higher material procurement expenses, changes in logistics, and so on. During a downturn, transparency in communication and openness are crucial.

Working on online reputation

During a crisis and budget cuts, customer service and content quality often suffer. When there's only one social media manager left instead of a whole team, it's unrealistic to expect them to respond quickly to comments. Staff reductions result in longer response times to customer inquiries, which is detrimental to loyalty, reputation, and sales.

One unanswered negative comment can snowball and harm the brand's image. During a crisis, audiences are more critical of brands, so it's crucial to respond promptly to feedback and address any issues. Otherwise, reputation repair will take more time and resources. Therefore, it's important to keep communication channels under control.

Work with reputation on Internet answering the reviewWork with reputation on Internet answering the review


Economic crises are a normal occurrence, so businesses need to be able to quickly change strategies and adapt. It is a mistake to cut advertising budgets first, as it will halt the flow of new customers. Instead, evaluate the effectiveness of different customer acquisition channels in terms of leads generated, eliminate unnecessary ones, and allocate budget and resources to the ones that work.

Additionally, during a downturn, focus on existing customers by engaging with them and demonstrating care. Offer personalized service and products through email marketing, push notifications, SMS, and other communication tools. Utilize multiple channels to ensure accurate delivery of information to the customer.

Do not halt marketing efforts, but instead, seek out new audiences, change product positioning, and even consider adjusting price segments. Deal with negative feedback promptly by responding to customer comments and always provide explanations for price increases.







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Author: Lyudmila Kovalenko






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