When there’s a threat of recession looming around the corner, many businesses opt to cut down on their spending. Unfortunately, the first element that takes this hit is the marketing efforts of the brand or organization. At HomeStars, as we are in the business of growing yours, we took a deeper dive into this phenomenon to understand its impact on businesses. We have done the research, so you don’t have to! Contrary to popular belief, cutting down on marketing efforts or spending during the recession actually hampers the business in the long run for short-term savings or goals.
While the forecasted recession may be unprecedented, there is much we can learn from past slowdowns. According to a piece by The Next Ad, research around the 2008 crisis showed that while companies who cut marketing budgets did well during the recession, companies who invested in marketing during the recession saw an average market share growth of 1.3% after the crisis. The same piece also shares research on the topic of the 1920 and 1921 recessions. It showed that companies that invested in marketing during the slowdown saw continued growth and sales through the period and after. On the other hand, companies that had cut down on marketing budgets faced the consequences of lower brand visibility and fewer sales, even three years after the recession. This was made possible as even in difficult times, these companies chose to focus on long-term goals like growth and market share instead of short-term savings and also took action early on into the crisis.
So here are our top 3 takeaways when it comes to investing in marketing during the recession:
Be Visible At A Lower Cost
Marketing during the recession offers an excellent opportunity to become visible at lower costs than normal times. As your competitors spend less, the online or offline noise around the industry is reduced and your business has a better chance of standing out. With an upgraded account, you can also feature your business on your competitor’s profile with the HomeStars featured ads to make your business more visible to homeowners. Also, according to our Reno report 2022, the renovation and home improvement budget of average homeowners is expected to double to $25,222 in 2022, as compared to the average spend of $13,043 in 2021. So it pays to advertise your business for these project-ready homeowners.
Focus On Long-Term Goals
While it may be tempting to cut down on spending during a recession, focusing on your long-term goals will help allocate the budget in an efficient manner that brings in results. As homeowners become more conscious about every penny spent, they are also looking into the best and safest pros for handling their projects. As people are doing more research on whom to hire and going through more reviews of pros, it would be a good idea to stay visible during this downtime to get more business when the economy recovers. After all, in business as in other areas, out of sight does translate to out of mind. And you would want to be on homeowners’ top of mind when they do decide to execute planned projects and your marketing budget can help you achieve that.
Research On Where To Invest
While research does show that marketing during a recession is a good idea, it pays to look into channels of investing when spending during a slowdown. For this, it’s best to analyze past performances and focus on low-budget but high-performing channels. If you have a sales funnel for your business, it would be easier to see where your leads are coming from and what is the conversion rate. You can also explore your options at HomeStars like upgrading your account, to get access to our 8 Million annual website visitors. This is also a good time to showcase your deals on HomeStars to connect with Toronto-based project-ready homeowners who may be looking for deals.
With these goals in mind, you are sure to help your business grow even during the recession! Claim your account today to explore more such opportunities.