The last couple of years has been a rocky road for marketers. Gartner found that marketing budgets for B2B companies have decreased since 2020, from an average of 11% of revenue to 6.4% of revenue. Now, as we face exceptionally high inflation and a potential recession, marketers are understandably wary and looking for ways to recession-proof their marketing strategies.
Luckily, you can take several key actions to build a marketing strategy that can withstand a recession. In this article, we have compiled five key actions that will help bolster your marketing program and prepare you for whatever happens in the coming months.
1. Focus on ABM
Account-based marketing (ABM) is defined as "a business marketing strategy that concentrates resources on a set of target accounts within a market… [using] personalized campaigns designed to engage each account, basing the marketing message on the specific attributes and needs of the account." Campaigns are 1:1, 1:Few, and 1:Many, designed to go beyond lead generation and create relationships with current and prospective buyers.
And yes, current customers continue to matter with ABM. Statistics show that the probability of selling to an existing customer is about 70%, while the chance of selling to a new prospect is 5-20%. Finally, 80% of your future profits are shown to come from just 20% of your existing customers.
Though not easy to do successfully without the right ABM experience, RollWorks states that 99% of companies that implement ABM campaigns experience higher engagement and achieve an average 80% win rate. Not only does this support high ROI, but it also supports prolonged growth and the ability to upsell and cross-sell current customers. In fact, 24% of companies implementing ABM saw an average of 27% growth year-to-year over three years, as reported by RollWorks.
Key Components of a Successful ABM Strategy
To master ABM, whether working with an agency or in-house, having the right Ideal Customer Profile (ICP) and Target Account Lists (TAL) are key. Without a clear ICP, your TAL will suffer, and you may be wasting precious budget dollars on potential buyers that aren't likely to purchase. With a specific ICP, you will be able to focus your budget on pursuing high-value leads that are more likely to turn into customers.
With a specific ICP, you will also be able to gather data to bolster your TAL – specifically data on the right audience to position your products or services in a way that resonates with and speaks to that audience. The key here is to get the right message, info, etc., in front of the right audience at the right time. To further leverage ABM, focus on your niche targeted accounts/audiences - especially those in a "recession safe" industry. By doing so, you will be setting the groundwork for a fuller sales funnel in the future when other marketers may be struggling to generate buyer interest.
2. Align Teams for Greater Insight into Processes and Productivity
"If you're looking at sales and marketing spend as a whole, marketing's percentage of that envelope should be increasing. And it's because of the way buyers are evaluating their purchases, they're doing it all digitally. So, that's tough if you're in a sales agency. If this plays as I think we all believe it will, you may be reducing the size of your sales force, expecting more bookings per head. It should be more efficient. If there's more digital engagement and more digital evaluation of options and buying happening more passively through digital channels, your sales team should be more efficient and it should be a smaller cost."
- Drew Chapin, VP of Marketing, Hyland
Aligning departments is a hot topic in the marketing world and with good reason. Working with teams in silos leads to disjointed workflows and unnecessarily complicated processes. But when aligning teams, all teams must be clear on the business goals and financial constraints at any given time.
Marketing is responsible for communicating the value of efforts - those that lead to direct ROI and those that are harder to measure (i.e., customer engagement/relationship management, employee retention, sales enablement) to aligned teams, especially to finance as we continue in 2022. Ultimately, buyer behavior and ABM are changing the sales cycle and process, blurring the lines between the sales and marketing departments. No longer are sales controlled by sales employees. Instead, marketing is handing off hot leads that worked their way down the sales funnel through ABM strategies to sales, improving opportunity-to-close rates.
3. Retention!
In a recession and other times of uncertainty, retention is a huge factor. Both client and employee retention are key to the sustainability of an organization.
On average, it costs a company 6 to 7 times more to acquire a new customer than to retain one. And just a 5% increase in customer retention can increase revenue by anywhere from 25 - 95%. This is why customer retention is so important, especially when it comes to maintaining your business during a recession.
According to a LinkedIn survey, marketing has the highest turnover rate compared to all other industries at 17% annually. In other words, you have about a one in five chance of losing a member of your marketing team every year, which, in turn, means you might be searching for, interviewing, and onboarding employees every year, depending on your team’s size. While this is never a fun process and is always time- and cost-consuming, during The Great Recession, this process is even more challenging. Similarly, you also don't want to lose the customers you worked so hard and invested money in to earn.
Client Retention
To retain clients, marketing must go beyond simple lead generation. Generating leads will not be enough as we continue in 2022. The focus must be on engaging current and potential clients by providing value to them. This can come in the form of content, training/webinars, NPS scores, and other strategies that will add value to client engagements. This is also proven to be beneficial to your revenue as stats show that 65% of a company's business comes from existing customers.
Employee Retention
To retain employees, your business must consider what employees want from their job. Remote work options are helpful and championed currently, but it goes beyond this. Studies show that employees are looking for a purpose in their job, they want to see technology advancements that create efficiency in their daily work, as well as a working environment that is more conducive to productivity and creativity.
In addition, providing upskilling opportunities for employees is critical as employees want to know there is upward mobility in their position. The key here is to invest in current employees and monopolize current skills and knowledge rather than trying to build a new team. To take it a step further, some companies who are undertaking thought leadership programs are investing in employee growth as thought leaders. This includes supporting writing (i.e., blogs and books), speaking (i.e., podcasts and seminars), and other engagement opportunities for these employees.
4. Diversify With New and Support Existing Partnerships
Any current strategic partnerships you may have are important to continue to foster. The right partnerships offer you and your clients tools/resources that can increase productivity and cut costs. In addition, adding new partnerships often adds new revenue streams to your business. With new and existing partnerships, you can also expect to have additional perspectives on how to weather the recession we are facing and benefit from having expanded reach to potential customers.
5. Invest in Technology
Technology transformation is another hot topic at the moment. The pandemic showed businesses across all sectors that their tech systems were outdated and not optimal for a digital world. As a result, tech investments have risen dramatically, and cloud technologies are also seeing a huge increase in adoption.
For marketers, the key is adopting technologies that will support more efficient workflows at a lower cost. Data and insights from a tool like 6sense can help with better ICP targeting. Adding a chat feature, such as Drift, can help propel the buyer through the funnel with self-serve information and help.
"One of the most common mistakes is to cut your marketing budget when you're in a recession. A downturn is a time when your marketing is most important because you need to bring in new business."
- Adam Jacobs, Entrepreneur Article
As we face high inflation and a potential recession, these recession-proofing strategies will help you to keep your marketing program moving in a positive direction. Overall, communication across departments and remaining on point with your targeting is key. But also remember to keep current employees and customers in mind.
If you have any questions or want help building a marketing strategy that is ready for anything, contact us.