The cost of living crisis: implications for B2B marketing
There’s no doubt that the economy in the UK and Europe is in the grip of another challenging crunch right now.
The Office of National Statistics reported the following in June 2022:
- Household Cost Indices (HCIs) saw similar inflation rates as the Consumer Prices Index (CPI) and the Consumer Prices Index including owner occupiers’ housing costs (CPIH) at the end of 2021.
- All three measures of consumer price inflation have seen sharp rises since March 2021.
- Transport has contributed more to rising inflation for higher income households than lower income households over recent months. This resulted in households in the ninth income tier seeing higher inflation rates than those in the second income tier at the end of 2021, as measured by the HCIs.
- Current drivers of inflation include essentials such as food and non-alcoholic beverages, transport and housing, water, and of course energy – electricity, gas, and other fuels – which combined account for over 50% of the CPIH basket by weight.
- Experimental data found that a group of 30 lowest-cost grocery items had a similar 12-month growth rate as the food and non-alcoholic beverages component of CPIH in the year to April 2022, but there was wide variation between products.
- Around 60% of adults report spending less on non-essential items in response to rising costs.
In this article, we’ll discuss the implications of the cost of living crisis and the incoming recession for B2B marketers and B2B marketing in general.
What does the cost of living crisis and potential recession mean for B2B marketers?
Where private consumers in the UK are protected by caps on rising bills, there is no such support for businesses. Therefore, organisations must critically asses the buying decisions that they make as we enter the recession.
Navigating these times effectively will be challenging – but there’s a number of actions your business can take now to lessen the impact of the cost of living crisis.
- Re-evaluate your brand positioning
According to a survey by Lucid, 77% of B2B marketing leaders said that branding is critical for business growth. For that reason, it’s important to reassess your brand positioning.
An economic depression might be the best time to take stock of the industry landscape and determine the effectiveness of your unique value proposition. Double down on the sectors you are the most strong in, and prepare for unforeseen challenges that might pose a risk to your business.
Additionally, it makes sense to understand that recessions tend to change customer behaviour, forcing them to reconsider their priorities when it comes to spending money. So, take time to assess how your competition is positioning their offerings for an evolving market – this will help you identify areas that can differentiate your brand in front of your prospects.
Use your marketing messages to address the unique needs of consumers who are struggling during this recession. Offer viable alternatives that help them to solve their problems. This can give you a considerable head start over the competition.
- Leverage what makes you unique
What do you do best? What sets you apart from your competition?
Find the answers, because they’re your key to surviving an economic crisis!
Understand your unique brand values and market them in a way that helps your customers relate with your offerings. You can accomplish this by evaluating your customers’ perceptions of your brand, and then delivering according to their expectations.
Offer customers more value so you can build trust and loyalty. This value-based approach increases access to your brand using promotional programs, informational marketing, and more.
Also, if you target niche industries with specific products and services, you have a better chance of withstanding a recession because customers in these markets often don’t have a wealth of options. So, if you can weather the economic impact of a downturn and help them do the same, they’ll love you all the more for it.
- Build your email list
This is one of the best ways to sustain your business during a recession. Your email list offers a chance to warm up old leads, get in touch with previous clients, and retarget one-time buyers. Investing in relationships is always worthwhile – especially so in downturns.
Utilising existing email lists is a massive benefit if you are nervous about investing your resources in acquiring new customers. Entice existing customers with loyalty rewards, referral bonuses, and send out email newsletters regularly to stay on top of their minds.
80% of marketers claim that email is the best way to acquire new customers. Use B2B email marketing strategies to build your list and manage customer relationships through your CRM system.
- Take time to understand what the data is telling you
Use Google Analytics and other data to help you identify the needs of your target market as well. Start researching the best marketing strategies to enhance your branding and sales manifold.
This data serves a vital purpose before and during an economic crisis; so start digging deep and evaluate the pattern of your sales reports and consumer trends.
Learning about your customers is critical to understanding changes in their preferences when the economy plunges. Your company can use this information to create marketing strategies that provide value to your customers and fulfil their requirements, despite the challenging times.
Being more targeted in whatever you do pays off – you can learn from your best-performing activities and continue using them to bring in business throughout the recession.
- Gather customer reviews and testimonials – and use them to reassure
Regardless of the industry you operate in, your biggest asset in a recession will be your current customer base.
So, make sure that your marketing strategies are targeting the most valuable and happy clients. Remember that if you treat your customers well, they’ll reward you with their loyalty – and that’s arguably the most powerful currency there is.
Satisfied customers recommend your business, bring in referrals, and leave glowing reviews and testimonials for you. Customer reviews are an essential strategy for marketing at any time but especially in a recession. They have the power to influence purchase decisions for prospective customers by validating your company’s reputation.
Research has found that 30% of consumers trust online reviews and make their buying decisions based on them. Therefore, asking your customers to provide testimonials will help you to recession-proof your business by differentiating your brand from the competition.
- Focus on customer retention
Research suggests that increasing customer retention rates by 5% can bring in 25% to 95% more in profits. With these statistics in mind, you can see that customer retention is the way to go if you want to execute recession-proof marketing.
To retain existing customers, you’ll have to rekindle your relationship with them by showing appreciation and communicating with them – and not just in a promotional sense! Remind them that you can offer them assistance whenever they need it, and give them exclusive access to promotions and discounts.
Following up with customers after they make a purchase or invest in channels will also keep them engaged with your brand.
- Don’t cut your marketing budget!
Industry experts have found that cutting your marketing budget due to an economic downturn might help you generate short-term benefits. However, most recession-based research indicates that businesses that keep marketing will ultimately fare much better when the recession lifts, because of the familiarity.
Moreover, slashing your marketing budget means cutting off valuable touch-points with the same audiences that helped you to remain afloat in difficult times. Therefore, brands that double down in their marketing expenditure are better positioned to succeed during a recession.
Conclusion
The impact of a recession can be fatal for businesses that don’t invest in recession-proof marketing.
Start consciously planning for economic downturns while you have the flexibility and the budget to do it right. It’s always good to have a reserve of leads, so revenues keep streaming in no matter how hard it gets for other businesses to survive.
How confident do you feel?
Do you need help navigating these challenging times? Are you finding it hard to talk business at a time when decision makers’ minds are elsewhere?
The team at Velo is adept at creating marketing communication campaigns that fit the mood and help position products and services in challenging times to under pressure buyers.
Let’s talk. Start the conversation here
Further reading
Best resources for B2B technology marketers
Top challenges facing technology businesses
