With talks of inflation at the forefront of many marketing discussions, Marigold fielded a recession-themed survey aimed at a small group of highly-engaged marketers. Budget concerns dominate the findings and – paired with uneasiness regarding customer retention – reinforce the importance of loyalty programs moving forward. We also explore the channels that marketers feel are most effective when their budgets get cut. Here’s what we found.
A looming recession potentially threatens marketing budgets
Over a third of marketers are incredibly concerned that their marketing budgets will be reduced significantly, with an additional 44% stating they are somewhat concerned. All-in-all, only one in five marketers aren’t concerned about budget reductions in 2023. Finding methods to stretch budgets further will be paramount in a tightening economic environment.
Budgets and loyalty dominate marketing-tactic concerns
Budgets are clearly threatened, but so too might be the loyalty of customers. 33% of marketers believe their current customers may leave in pursuit of lower priced products. Waning customer loyalty highlights the need for programs that increase retention – in an era of financial uncertainty, loyalty programs, and the value they provide, can appeal to the financial considerations of customers, while also helping brands gather key consumer insights via zero-party data (derived from interactives such as surveys and quizzes). Consumers are more likely to consider their rewards and value stored in loyalty programs as currency for making decisions throughout the household’s needs, from decisions on where to dine to which clothing, goods and services to purchase.
Email reigns supreme
Marketers will double down on email over the next year, with no other communication method coming close. On the flipside, in the event of budget cuts, marketers will be most likely to greatly diminish investments in banner advertisements and social media advertisements. This rationale becomes better understood when taking into account rising advertising costs and the fact that emails – which aren’t affected by algorithms or censorship – can be sent for free once an email platform has been secured. Furthermore, the email channel is incredibly easy to personalize at scale when a brand has zero-party data insights on their consumers.
Oddly enough, SMS is not recognized as a critical channel, which could be a huge misstep for marketers as consumers respond incredibly well to personalized messaging and offers in this channel. Like email, this owned channel is cost effective, timely and relevant and should be considered seriously both in or out of a recession.
There is a divide on acquiring new customers versus retaining existing ones
A majority of marketers (56%) believe acquiring new customers will generate more revenue, though a sizable minority side with retaining existing customers (44%). Regardless, both are critical to revenue and present both challenges as well as opportunities for marketers. Balancing efforts and resources across these two stages of relationship marketing ensures a safe bet when engaging consumers. Being able to execute on both strategies in one martech platform also creates efficiency and reduces risk that you bet on the wrong tactic.
The rise of loyalty as a recession-proofing strategy
With a looming recession follows budget concerns from both marketers and their brand’s customers. Marketing budget reductions will force marketers to become even more financially conscious, and thus it is of little surprise that so many will be emphasizing email over other communications. Customer budgets are perhaps just as important to consider moving forward, with a third of marketers in fear that their customers will chase lower priced products elsewhere. This creates a delicate scenario in which brands must remain financially efficacious while providing clear and real value to an increasingly budget-focused audience. Cue the rise of loyalty programs, which, when developed effectively, can be of benefit to both those focused on acquiring new customers (appeal to the financial desires to begin a new relationship) and those focused on retaining existing customers (build on the relationship with perks and personalized experiences).
Loyalty is an essential part of a Relationship Marketing.
Get the tips and strategy that will transform your marketing efforts.
Methodology Data is from the Marigold survey “Will the Recession Change Your World?” Marketers from Marigold’s email database and social media accounts were surveyed in November and December of 2022. Questions about the survey? Email us at [email protected].
