Opinions of contributing entrepreneurs are their own.
If you’re a business owner, a lot has already happened this year that should make you stop and think about the state of your money (and that of your business).
Inflation has depreciated every dollar, interest rate hikes by the federal government have made it more expensive to borrow, and while recent bank failures may not have directly affected your business, they certainly caused a deserved shake-up.
With all this going on, my husband and I decided to meet with a mentor and financial advisor who has managed hundreds of millions of dollars in capital over the past 25 years to review our investments.
He pointed out that while we both have different investments, we have mainly put our money into something that has paid off passed many times standard stock market returns – and that something is our respective companies.
After that meeting, I came to the conclusion that it was wisest to invest more in my most trusted asset: my company. Sure, we also have a lot of “safe” investments, but really, in the long run, nothing compares to our companies in terms of return on investment (ROI).
The biggest investment I’m making is in my marketing: I’m increasing our annual marketing budget by over 20% this year to over $7 million.
I made this decision based on hard-won experience from surviving two economic recessions. The first (2008), I cut my marketing and we barely survived. The second (2020), I refused to cut back on our marketing and as a result, growth over the last three years has averaged 20%, after averaging only 5% in the previous decade. I learned that marketing is crucial to not only growing a business in good times, but growing it essential to survive when times get tough.
If you’re like me and know that your business is your greatest asset, let me share with you three marketing principles I’ve followed and applied to strengthen my business and grow sales despite recessions and economic turbulence.
Related: Why a Recession Is the Worst Time to Skimp on Brand Marketing
Recessions come and go, and some companies leave a legacy we can learn from. Kellogg is a perfect example of this. In the late 1920s, Kellogg and Post dominated the breakfast cereal market.
When the Great Depression hit, Post reacted fearfully, slashing spending and cutting back on advertising, while Kellogg did the opposite. Kellogg moved into radio advertising, heavily promoting a new breakfast cereal called Rice Krispies.
In 1933 the economy was the worst it had ever been, but Kellogg’s profits rose 33%. Kellogg not only survived the economic crisis, but went on to become the leading cereal brand – and has remained there more than 80 years later. In 2017, Kellogg had a market share of 30%with General Mills at 29% and Post at 18%.
I have experienced a similar phenomenon with my company, PostcardMania. In 2008, the recession devastated many businesses. We were hit hard by the collapsing real estate market as mortgage brokers accounted for 46% of our clientele. In 2009, a consultant at the time saw how much I was spending on marketing each week and said something along the lines of, “We can save a lot of money if we cut back.”
Against my better judgement, I listened and stopped marketing in hopes that we could save our resources and increase profits, but that only made the situation worse. What was a small drop in sales in 2008 (about $150,000) grew into a much bigger loss in 2009 – a whopping 15% of sales and well over $1 million.
I made a sharp U-turn and got my marketing going again as quickly as possible, and we were back in 2010. I vowed never to cut my marketing budget again.
Then in 2020, as the pandemic knocked out the economy, I knew exactly what steps to take and maintained my marketing no matter how hard it got – and it got hard with sales down over 40%.
But guess what my competitors did? Just like I did in 2008: they stopped or reduced their marketing. The difference between 2008 and 2020 was clear; we grew PostcardMania in 2020, and then things got even better in 2021 and 2022. Since 2019, our revenue has increased by 60% (an average growth of 20% per year) after 10 years of average growth of 5%.
I know it sounds counterintuitive to invest more in marketing when the economy is bad, but history doesn’t lie, and my own experience backs this up. Keep your marketing strong, and your leads and sales will stay strong too.
Related: 6 Recession Proof Business Marketing Strategies
2. Choose the marketing channels with the highest ROI to get the most out of your budget
So, which marketing channels should you invest in? The answer is simple: the ones who work.
If you’re not already closely monitoring your marketing, start now. Are critical that you track what you spend and where leads and new customers come from, so you know what works and what needs improvement.
Once you know which channels deliver the highest ROI, you can invest more there to grow your leads, which in turn will generate more sales and revenue (and you can tinker with the underperforming tactics until they’re in a good range or split them back to suit your budget needs).
One of the marketing tactics that I think has a super high return on investment is retargeted mailings. Triggered email gets the most out of every lead by targeting specifically the people who have already shown some interest in your products or services by visiting your website.
Depending on who you want to target, a postcard will be automatically printed, addressed and shipped within 24 hours of their website visit. Targeting can be based on the time a visitor spends on your site, the web pages they visit, the items they put in their shopping cart, or any number of other factors.
Because you only target hot prospects and send out a few postcards a day (rather than thousands at a time like traditional direct mail), the initial cost of an activated campaign is relatively low – meaning your ROI potential is much higher .
One of our real estate investment clients, Mark Buys Houses, added retargeted direct mail to their follow-up. They spent $647 to send just over 100 postcards to his website visitors. As a result, he converted one lead into a sale and earned $70,000 in revenue. That’s a 10,710% ROI!
If you decide to increase your marketing investment like I did, I recommend starting with tactics aimed at improving website conversion or follow-up. You’ve already spent money on the hardest part – taking someone from ignorant about your company to actually interested – so take some time to find out if investing a few bucks per lead will translate into more sales. Just don’t forget to follow closely!
Related: How to Adapt Your Marketing to Survive a Recession
3. Take advantage of free communication tools to stay in touch with prospects and customers
Not every marketing tactic costs money; some are 100% free. Using free marketing platforms during tough times will not only help your budget, it will also help you communicate better.
First, I suggest perfecting and increasing your email marketing. With tools such as Constant Contact and Mailchimp you can send free emails up to a certain amount. Send promotional emails with catchy subject lines and enticing deals to drive more clicks. Consider creating an email newsletter that your audience will enjoy reading. It can contain valuable information about your industry, tips and tricks, recently completed projects or features about your company to keep your customers connected to your brand.
Second, I recommend refreshing your website with new, SEO-rich content. You can write the content yourself or find a willing team member to help – or even try out the latest craze, artificial intelligence (AI). Just give a prompt and let AI do the heavy lifting (aka writing) for you, then go after it and make your own mark with expertise only you can provide. Blog posts, web pages and other types of articles will not only boost your website in the search engine results on Google, but it will also increase engagement on your website.
Finally, get more active on social media. Post creative, informative content that attracts people and encourages engagement, such as polls or questions. Facebook and Instagram also offer you the opportunity to list your products and services on a store page for free. Even though it takes a little more time and energy to post every day, communicating consistently with customers and prospects is invaluable and can lead to increased revenue and a positive brand image in your field.
At the very end of this economic downturn, you can at least say you gave it your all and worked hard to build your business to the best of your ability. Invest in the right areas and you will reap benefits that will last far beyond the most recent crisis.