How to Create a Powerful Marketing Strategy (Even When Your Budget’s Been Cut)

A systematized marketing strategy can provide continued growth during an economic downturn, especially for local businesses.

If you need to tighten the belt on business expenses right now, you’re not alone.

With the 2022 bear market and the threat of a recession in 2023, many small businesses feel the pinch around cash flow.

It can make sense to reduce marketing spending. But how and why you do so can be the difference between growth and stagnation over the next year — and beyond.

These 3 marketing strategies will help you streamline your marketing efforts to create sustainable growth despite restricted resources.

As a local founder, it can be difficult to know how to streamline your marketing strategy when your resources are limited.

I’m a huge fan of Andrew Chen’s work, and I was excited to see his latest article about reinventing your product growth strategy for a tech downturn.

In this article, Chen unpacks how businesses should rethink their strategies within the restrictions of our current market.

Here’s how those tips apply to local businesses:

1. Be strategic with the resources you use for brand marketing. Brand spending can get a little fuzzy and often doesn’t directly lead to sales. When resources are tighter, the strategy around building brand equity needs to focus on low-cost options with a sales connection. (More on this below.)
2. Design your marketing around what is trackable. Only some things have trackable results when it comes to marketing. When your budget is tight, you need to know what is working and what isn’t. Anything that cannot provide provable and trackable results is what you need to do less of right now.
3. Focus on high-value customers. You will eventually get back to the point where you can spend more on marketing. But first, you need the revenue to back it up.

This narrowed focus will help you weather the current market. Eventually, the economic conditions will change, and you can expand your strategy.

Note: Many companies will opt to cut marketing completely in times like this. Those that do tend to see a correlating decline in sales growth, which is harder to overcome in a bear market.

At this moment, the goal must be to (as Chen puts it) “live to see another day.”

For local businesses, the first step to realigning your strategy for a bear market is to rethink how you build brand awareness in your community.

There are two types of marketing — brand marketing and direct response.

Direct response is what most people think of when they think of marketing. It’s the sales promotion that leads your audience directly to a sale. It’s the email about a limited-time discount or the flyer that includes a coupon.

Brand marketing is about building brand awareness and equity. It is what helps your community to get to know you, trust you, and keep you top-of-mind for your products and services.

Brand marketing can be low-cost and still provide value. Focus on building community relationships that grow over time.

For local businesses, brand marketing looks like…

• Sponsoring sports teams and random community events not tied to your core values,
• Expensive sponsorships of local events such as a 5K race, golf tournament, or Chamber of Commerce event (without a clear promotional strategy to turn those into increased sales opportunities around the event)
• Posting on social media and investing in social media specialists that don’t produce clear and measurable returns, and
• Creating trendy and expensive videos and local TV commercials (which require a lot of resources to do right but often do not have trackable results).

While brand marketing is important, these types of strategies do not typically have a direct connection to sales. And when times are tight, this is the place to pull resources from — or find a way to make the direct sales connection.

This doesn’t mean that you cut brand spending entirely. But it is time to be more strategic with it.

In a bear market, most small, community-based businesses should focus on organic brand awareness that only requires a little marketing spend.

Brand marketing should focus more on relationship value than on dollars spent.

This looks like…

• Showing up yourself, as the owner, to local events without being a formal sponsor,
• Volunteering in your community, especially if you can get your team involved in volunteering around causes central to your core values.
• Contributing your resources to community work that is deeply connected to your company’s mission. This is where brand spending makes the most sense, especially in more restricted markets.

This kind of brand marketing focus still requires your time (and some money). But it also builds equity and awareness in your community without spending more marketing dollars.

Essentially, local businesses should be careful with brand marketing during an economic downturn because it is generally hard to track. So it’s difficult to know if your efforts are (literally) paying off.

This leads to my next point:

The second step to thriving in a bear market is to focus your marketing resources around what is trackable for steady, long-term, predictable ROI.

Data-driven marketing strategy is easier to predict and refine.

When choosing what to keep and what to cut with marketing spending, the biggest mistake I see founders make is choosing to keep the thing they like most.

Unfortunately, putting a lot of time into something only sometimes means it has the biggest payout.

Our brains lie to us, which is why data is so invaluable. This is why I encourage our clients to be data-informed, not data-driven.

Data-informed marketing means you check your own biases and ensure your instincts are correct. It doesn’t mean you are driven only by results or numbers on a spreadsheet.

In a bear market, every marketing dollar has to count. And the only way to know how something works is to track and analyze data.

Some of these trackable mediums include…

• Locally-based SEO (specifically your Google Business Profile),
• Action-oriented ads,
• Referral programs,
• Sales promotion emails,
• PPC (pay-per-click) ads, and
• The tried and true postcard campaign. #EverythingOldIsNewAgain

Done right, these types of direct response marketing can provide trackable results — a direct line from the marketing ask to the sale.

The data can tell you what’s working (so you can do more of it) and what isn’t (so you can cut it).

Unlike other marketing avenues, social media is both difficult to track and has one of the lowest returns on investment.

Compared to the options listed above, social media requires more money and time than other marketing channels to perform well.

Most local businesses do not have that level of resources to invest, so they end up with simple brand plays at best or things that don’t work at all at worst.

On the other hand, you will find that we continue to recommend SEO and email strategies to all of our clients.

Why?

Because reports of the death of SEO (and email) have been greatly exaggerated.

Consider these statistics:

• The average lifespan of a blog post is over 2 years, as opposed to 6 hours for a Facebook post. (This number increases if the post contains updated evergreen content.)
• Most B2B marketers get more leads from SEO than from any other medium.
• Email marketing drives more sales conversions than any marketing channel.
• Email marketing is 20% more effective at customer retention than social media.

An investment in SEO and email will last for years, whereas social media is basically only as good as you are doing right now.

In a bear market, choose marketing strategies that keep working even when you’re not.

For community-based businesses, a local-centric SEO strategy is key to providing space to focus on what you love.

I mentioned in a recent article that a report from one of our clients reminded me of the power of a good SEO strategy.

Despite creating almost no new content this past year, their website saw an exponential increase in traffic due to our SEO work.

In fact, every one of our clients who have shifted the bulk of their marketing dollars from social media to SEO and email has seen a 5x-10x return on their investment.

When you base your marketing decisions on data, the choice practically makes itself.

The third step to refining your marketing strategy during a bear market is to focus on your high-value customers.

Who are your high-value customers?

These people are your raving fans (as coined by Ken Blanchard and Sheldon Bowles in their popular book.)

Not only do your raving fans come back to buy from you again and again.

They are also the customers who advocate for you and refer you to anyone and everyone who will listen.

In this way, they provide high and repeated value to your company and will continue to do so as long as what they love about you doesn’t change.

A high-value customer is one who buys from you repeatedly while also frequently referring you to their network.

When you have restricted marketing resources, your raving fan base will continue to drive revenue and at a much lower cost than new clients.

New clients require more time, energy, and money to move through the full customer journey.

Your raving fans have already been through it — and enjoyed the experience so much that they propel themselves through again and again while bringing others along for the ride.

Businesses need new customers for growth. But developing and retaining high-value customers make this growth easier to sustain in the long term.

Sustainability may not seem sexy or applicable when your company has been in a growth stage, but we can always trust the economy to ebb and flow.

The growth stage will eventually end (if it hasn’t already). Then what?

With the right marketing focus, you can maintain your company’s growth even with restricted resources and a more cautious audience.

When your marketing approach is strategic and not reactionary, then you will find sustainability.