Opinions expressed by Entrepreneur contributors are their own.
If you’re a business owner, a lot has happened already this year to make you stop and consider the state of your (and your business’s) money.
Inflation has every dollar shrinking in value, federal rate hikes have made it more costly to borrow, and while recent bank failures may not have impacted your business outright, it certainly caused a justifiable stir.
With all of this going on, my husband and I decided to meet with a mentor and financial consultant who has managed hundreds of millions of dollars in capital over the last 25 years to review our investments.
He pointed out that, while we both have various investments, we’ve primarily been putting our money into something that has paid off many times over standard stock market returns — and that something is our respective businesses.
After that meeting, I concluded it was wisest to invest more into my most reliable asset — my business. Sure, we have a lot of “safe” investments as well, but truly, in the long run, nothing has compared to our businesses 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 more than 20% this year to over $7 million.
I made this decision based on some hard-won experience I gained surviving two economic recessions. The first (2008), I cut my marketing and we barely survived. The second (2020), I refused to cut our marketing and, as a result, growth in the last three years has averaged 20% after averaging only 5% in the decade previous. I learned that marketing is crucial to not only growing a business when times are good, but essential to survival when times get tough.
If you’re like me and know that your business is your greatest asset, I want to share three marketing principles I have followed and applied in order to strengthen my business and grow revenue despite recessions and economic turbulence.
Related: Why a Recession Is the Worst Time to Skimp on Brand Marketing
1. Use the current economic conditions to your advantage to increase market share
Recessions come and go, and some businesses leave legacies behind that we can learn from. Kellogg is a perfect example of that. In the late 1920s, Kellogg and Post dominated the breakfast cereal market.
When the Great Depression hit, Post responded in fear, reducing expenses and cutting back on advertising while Kellogg did the opposite. Kellogg moved into radio advertising and heavily promoted a new cereal called Rice Krispies.
By 1933, the economy was the worst it had ever been, but Kellogg’s profits increased 33%. Kellogg not only survived the economic crisis but became the leading cereal brand afterward — and has remained in that spot more than 80 years later. In 2017, Kellogg had a 30% market share, with General Mills following at 29% and Post at 18%.
I experienced a similar phenomenon with my business, PostcardMania. In 2008, the recession devastated many businesses. We were heavily affected by the real estate market plummeting since mortgage brokers made up 46% of our clientele. In 2009, an advisor at the time saw how much I spent on marketing every week and said something to the effect of, “We could save a lot of money if we cut back.”
Against my better judgment, I listened and cut my marketing in hope that we could conserve our resources and increase profits, but that made the situation worse. What was a small revenue decline in 2008 (around $150,000) ballooned into a much bigger loss in 2009 — as much as 15% of revenue and well over $1 million.
I made a sharp U-turn and brought my marketing back up to speed as soon as possible, and we recovered by 2010. I vowed to never cut my marketing budget again.
Then in 2020, when the pandemic disabled the economy, I knew exactly which moves to make and maintained my marketing regardless of how rough it got — and it did get rough to the tune of sales being down over 40%.
But guess what my competitors did? Exactly as I did in 2008 — they froze or reduced their marketing. The difference between 2008 and 2020 was obvious; we grew PostcardMania in 2020, and then business got even better in 2021 and 2022. Since 2019, our revenue has been up 60% (an average of 20% growth per year) after 10 years of averaging 5% growth.
I know it sounds counterintuitive to invest more in marketing when the economy is poor, but history doesn’t lie, and my own experience backs this up. Keep your marketing strong, and your leads and sales will remain strong as well.
Related: 6 Recession-Proof Business Marketing Strategies
2. Choose the marketing channels with the highest ROI to make the most of your budget
So, which marketing channels should you invest in? The answer is simple — the ones that work.
If you aren’t already tracking your marketing closely, commit to starting right now. It’s critical that you track what you’re spending and where leads and new customers are coming from so that you know what’s working and what needs improvement.
Once you know which channels yield the highest ROI, you can invest more there to grow your leads, which in turn yields more sales and revenue (and you can tinker with the lower-performing tactics until they’re in a good range or pare them back to suit your budget needs).
One of the marketing tactics I find to have a super high return on investment is retargeted mailings. Triggered mail makes the most of every lead by specifically targeting the people who have already shown some kind of interest in your products or services by visiting your website.
Depending on who you want to target, a postcard is automatically printed, addressed and sent within 24 hours of their website visit. Targeting can be based on the length of time a visitor spends on your site, the web pages they visit, the items they put in their shopping cart or a number of other factors.
Because you’re only targeting warm prospects and sending a few postcards a day (rather than thousands at a time like traditional direct mail), the upfront cost of a triggered campaign is relatively low — and that means 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 mail just over 100 postcards to his website visitors. As a result, he converted one lead into a sale and made $70,000 in revenue. That’s an ROI of 10,710%!
If you decide to increase your marketing investment like I did, I suggest starting with tactics focused on improving website conversion or follow-up. You’ve already spent money on the hardest part — taking someone from unaware of your business to actually interested — so take the time to find out if investing a few more dollars per lead will translate into more sales. Just don’t forget to track closely!
Related: How to Adjust 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. Leveraging free marketing platforms during tough times not only helps your budget, it also helps you communicate better.
First, I suggest perfecting and increasing your email marketing. Tools like Constant Contact and Mailchimp let you send emails for free up to a certain amount. Send out promotional emails that include catchy subject lines and enticing deals to increase clicks. Consider creating an email newsletter that your audience would enjoy reading. It could include 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 freshening up your website with new, SEO-rich content. You can write the content yourself or find a willing team member to help — or even give the latest craze, artificial intelligence (AI), a go. Just provide a prompt, and let AI do the heavy lifting (a.k.a. writing) for you, then go over it afterward and put your own stamp on it using expertise that only you could 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.
Lastly, get more active on social media. Post creative, informative content that draws people in and fosters engagement, like polls or questions. Facebook and Instagram also allow you to list your products and services for free on a shop page. Even though it takes a bit more time and energy to make posts every day, communicating consistently with customers and prospects is invaluable and could lead to increased revenue and positive brand image in your area of expertise.
At the end of this economic downturn, at least you can say that you gave it your all and worked hard to build up your business to the best it can be. Invest in the right areas, and you’ll enjoy benefits that last far beyond the most recent crisis.