Our Take On: Continuing to Market Through a Declining Market
You Simply Can’t Afford Not to Stay on Your Charted Path
When it comes to the current state of the economy, the old saying what goes up must come down has never seemed truer. Ever since the Federal Reserve flooded the economy with cash and near-zero interest rates to counter the effects of the pandemic, it has seemed that markets would continue to soar to unimaginable heights. (As a New Yorker, it was a joy to watch as previously boarded-up businesses re-opened and new boutique businesses took over spaces that had lain dormant through the height of the pandemic. And it was even better to watch the optimism spread to small cities and towns across the country.)
But the failure of Silicon Valley Bank (in a mere 48 hours) and the spreading virus of tech industry layoffs are unmistakable signs that the economic pendulum may be swinging. What does that mean to you as a businessperson? It is more important than ever before to stay on your charted and well-considered marketing path. The health—and maybe the very survival—of your business depends on it.
The High Cost of Losing Customers
According to a December 2022 article in the Harvard Business Review, customer retention, enabled by consistent marketing, is vital to surviving a downturn in the economy. The author notes, “Not only is retention less vulnerable than acquisition to the short-term swings of a bad economy, but the rule of thumb that it costs five times more to win a new customer than to keep a current one becomes even more extreme in a downturn. As new business slows, and new leads are harder to come by, the multiple expands.”
Let’s reflect on that for just a moment: If a sudden scarcity of resources prompts the reaction of slashing your marketing budget, you are in serious jeopardy of losing current customers. And remember that long-term, loyal customers will always be the backbone of your revenue stream. Again, according to the Harvard Business Review, companies that focus on customer loyalty grow revenue roughly 2.5 times faster than their peers.
The bottom line: Your insurance policy for ensuring that those invaluable customers stay with you is to stick with your marketing plan and remain consistently in front of your existing customers and prospects. Continuing with all the touch points your customers and the market have come to expect because as the HBR has explained, it may end up costing you more than just saving on your Marketing budget over the next year.
Up Next: How to jumpstart marketing after a buyout. A buyout can be disruptive to every area of your business, including the marketing that will help you retain your customer base. Here’s how to deal with that disruption.