Plus 2 More Channels to Consider
A recession is looking ever more likely in 2023 and businesses are preparing for the worst. Revenue and expenses are under greater scrutiny across the board, including marketing, where a tighter focus on ROI will impact many channels. However, one channel that is likely to see renewed interest is email.
Let’s take a look at why email is the most effective channel for marketing during a recession, how you can use it to survive or even thrive and discover two more channels that you should consider to maximize your marketing ROI during the downturn.
The Wall Street Journal, Forbes, CNBC, and Business Insider are predicting a 61% to 70% likelihood of recession in 2023. What is prompting these warnings? Moody’s Analytics chief economist, Mark Zandi, points to the usual suspects. “We’ve seen this story before. When inflation picks up and the Fed responds by pushing up interest rates, the economy ultimately caves under the weight.”
Against this backdrop of fear and uncertainty, businesses have been evaluating everything from cash flow and debt to operating expenses. So, it should come as no surprise to marketers that their strategies will need to be adjusted to account for tighter budgets and a more cautious consumer mindset.
As a result, marketing spend and media budgets for traditional channels such as TV, radio, and print, as well as digital channels like paid search and paid social may all be subject to cut-backs. But one channel will continue to thrive: email.
Let’s start by stating the obvious: email is a great choice for marketers during a downturn because it is a cost-effective and direct way to reach and engage with target audiences. In fact, we predicted in a recent blog that email will break records in 2023. Here are just a few reasons why email should be your go-to during the downturn:
• Cost-effective: Email marketing is relatively inexpensive compared to other marketing channels, making it a cost-effective option for businesses that maybe operating on a tighter budget during a recession.
• Personalization: Email marketing allows for personalization and segmentation of audiences, which can increase the relevance and effectiveness of marketing messages. This can help businesses to better connect with their audience, even during a recession.
• Direct: Email marketing allows businesses to directly reach their target audience, which can help increase the chances that a marketing message will be seen and acted upon.
• Measurable: Email marketing allows for easy measurement and tracking of engagement, such as open and click-through rates, which can be used to optimize future campaigns and improve the overall effectiveness of marketing efforts.
• Increased in Online Activity: During a recession, budget-conscious people will spend more time online. Email can be easily accessed via smartphones, tablets, and computers, making it an ideal channel for reaching customers online.
Each of these are good reasons to lean into email, but there are two more that are even better.
Are You Ready for the Marketing Challenges of 2023?
Economic uncertainty will put the squeeze on consumers and brands in the coming year. Learn how adding the email professionals at Alchemy Worx to your team can help you not just weather the storm, but come out ahead.
Under normal economic conditions, a lot of emphasis is placed on acquiring new customers. However, during a downturn when marketing budgets are reduced and consumers are nervous about spending, it is your existing customer base that is going to see you through. If you want to retain existing customers, you must connect and keep them engaged on a regular basis. Email is the perfect tool for the job.
Email enables you to show your existing customers they really matter with direct, personalized offers, discounts, or exclusive programs. Email’s personalization and automation features make the process not just highly effective, but very affordable - even under the tightest budgets.
The typical email list is comprised of anywhere from 60% to 70% inactives. That’s a lot of potential customers sitting idle. Since traditional approaches to segmentation only focus on the most recently active customers, all those inactives are rarely emailed.
A re-engagment strategy that takes advantage of Audience Management monitors the entire audience –not just the recently active - to identify and target potential customers with the right message at the right time. This approach can increase the rate at which you reactivate inactive customers and help make up for new customer acquisitions that might be lost due to cutbacks in other channels.
For example, during the economic downturn at the beginning of the pandemic, Audience Management methodology enabled our client Global Industrial to engage and retain existing active customers while re-activating 20.7% of its inactives. This increased their active segment by 69%, taking it from less than a third to more than half of the total audience. In their case, this resulted in a net gain of more than 270K active customers. See the case study.
While we believe that email should be at the top of your list, the key to surviving or even thriving during a recession is not investing in just one channel but to create a balance between different channels that can achieve your goals. Here are two more channels worth considering when the going gets tough.
• Content Marketing: Creating valuable, informative content can help establish a business as a thought leader in its industry, build trust, and boost engagement with customers. This can be done through blogs, organic social media, and email. Learn more about content marketing in our recent blog.
• Referral Marketing: Encouraging existing customers to refer friends and family can be a cost-effective way to acquire new customers - even during a recession. Email is a great way to accomplish this goal.
If you want to learn more about how email and Audience Management can help your business weather the coming economic storm, schedule a call to discuss your program.