In times of economic downturn, it’s common for company leaders to consider slashing marketing budgets as a quick way to save money. 

However, research from McKinsey and other industry experts shows that maintaining or even increasing marketing investments in uncertain times is crucial for sustaining growth. Rather than pulling back, make strategic investments that help navigate a challenging financial landscape.

Joe Cahill, a seasoned marketing leader with decades of experience leading agencies like Baltoro and Straight North, suggests four key areas of marketing investment that can be highly effective even with tight budgets.

1) Customer Marketing: Maximizing Wallet Share with Existing Customers

Your current customers are one of your most valuable assets, especially during tough economic times. Customer marketing focuses on maximizing their wallet share by ensuring that your customers are fully aware of the range of services you offer. This involves:

• Exploring New Value Areas: Regularly engage with your customers to explore new areas where you can add value. This strengthens the relationship and uncovers new opportunities for collaboration.  Often, customers might not realize the full extent of what you can offer
• Leverage Customer Content: Use testimonials, case studies, and other content from satisfied customers.  Customer content is often used to attract new business, but just as important in supporting current customer expansion. This type of content is most authentic and highly persuasive.
• Respecting Relationship Boundaries: It’s important to understand and respect the boundaries within customer relationships. Overstepping can lead to customer dissatisfaction, so a “trusted advisor” focus is key.  Each new product or service area should be presented with opportunities and both positives and challenges explored.

2) Peer Referral Programs: Cost-Effective and High-Impact

Peer referral programs are a cost-effective strategy that can yield significant results.  They are most important for small businesses and startups without strong brand recognition. Your existing customers are often your best source of referrals, but it’s crucial to actively ask for those referrals.

• Leveraging Customer Networks: Encourage your satisfied customers to refer others to your business. Often, simply asking can lead to valuable new business opportunities.
• Partnering with Related Service Providers: Collaborate with other service providers in related fields to exchange leads. For example, a digital marketing agency could partner with a technical development firm, referring clients to each other when projects exceed their expertise or capacity.

3) Influencer Marketing: Leveraging Industry Thought Leaders

Influencer marketing can offer an excellent return on investment, with some businesses seeing as much as $6.50 in revenue for every $1 invested. By influencing those higher up the value chain, you can ensure your product is considered in key decisions.

• Strategic Influence: Focus on individuals or organizations that can influence broader industry decisions. For example, in the consumer health industry or architecture and design, engaging with influencers early in the project can shape the overall strategy and ensure your product is specified in.
• Case Study – Torchlight: Torchlight’s work with benefits brokers is an example of influencer marketing in action, where engaging with industry experts can drive significant business outcomes.

4) Channel Partners: Collaborating with Non-Competitive Peers

Partnering with peers who offer similar services in different segments can be a powerful strategy during a downturn. These partnerships allow for the cross-fertilization of leads and can open up new opportunities for both parties.

• Cross-Segment Collaboration: Find partners who operate in similar spaces but target different customer segments. This way, you’re not competing directly but can still benefit from each other’s networks.
• Mutual Referrals: Exchange leads with these partners, especially when you come across opportunities that better fit their expertise or vice versa.

Marketing during a downturn requires a strategic approach that maximizes the impact of every dollar spent. By focusing on customer marketing, peer referrals, influencer engagement, and channel partnerships, businesses can not only survive but thrive even in challenging economic conditions. These strategies, rooted in understanding and leveraging existing relationships, offer a cost-effective way to sustain growth and emerge stronger when the economy rebounds.