With the American economy trending toward a recession, many businesses will likely start to slash their marketing budget. However, marketing during a recession can help you grow your firm. Read 8 Figure Firm’s blog to learn more.
What is a recession?
There are a few different definitions of a recession. The National Bureau of Economic Research formally defines a recession as a significant, widespread decline in economic activity that lasts longer than a few months. A common definition considers a recession to be two consecutive quarters of declining GDP.
Signs of a recession can include negative GDP, rising unemployment, income decline, and contracted manufacturing. Other symptoms include fewer job openings and less consumer spending on non-essentials.
Recessions have a few different causes. Excessive debt, inflation, deflation, asset bubbles, and technological change can all lead to a recession, as can a sudden economic shock like the Coronavirus pandemic.
While recessions are not typically something we look forward to, it’s essential to remember that they are a normal part of the business cycle. Economies cyclically expand and contract, so even if a recession occurs, remember that it is only temporary.
Are we in a recession?
As of July 26, 2022, the National Bureau of Economic Research has not declared a recession in the United States. However, the NEBR prefers to give definitive answers on the economy, so we may not have official confirmation until next year.
Independent economists are also hesitant to say that we’re entering a recession. The economy may be slowing, but increased consumer spending and job growth show that the country is not currently in a recession.
Even though we’re not experiencing an economic downturn, the economy is still contracting, and experts are warning about a potential recession in the next couple of years. Even though hard times are on the horizon, your business doesn’t have to suffer.
Why does marketing during a recession help your firm?
When the economy starts to slow and contract, many businesses stop advertising. However, marketing during a recession can better position your law firm as the authority in your field. Let’s look at why.
Since many businesses choose to decrease the amount they spend on marketing, you’ll have the opportunity to buy more ad space with the same budget. More ad space leads to more potential clients learning about your firm, increasing your brand awareness.
Top of mind
With fewer competitors in the marketing arena, your advertising is more likely to stay at the forefront of a client’s mind. Staying top of mind is crucial since once clients have money to spend, they’ll turn to brands they recognize.
Spending money on marketing during a recession may seem counterintuitive, but continuing to advertise your firm demonstrates stability to potential clients. During uncertain times, your law firm can become a symbol of strength.
Examples of marketing during a recession
Throughout history, many companies have benefited from marketing during a recession. Here are some businesses that benefited from advertising despite an economic downturn.
In the 1920s, Post was the authority in ready-to-eat cereal. However, when the Great Depression hit, the company decided to decrease ad expenses. Kellogg’s went the opposite direction and doubled its marketing budget, causing its profits to rise almost 30%.
Before the recession of the 1970s, Toyota was experiencing solid sales. So when the economy started to slump, they resisted the urge to slash their marketing budget. Their dedication to advertising led Toyota to surpass Volkswagen as the top imported carmaker in the United States.
After the dot-com bubble burst in 2000, Amazon saw its stock plummet to $10 a share. However, through consistent marketing and innovation, they’ve become one of the most valuable companies in the world.
How to market during a recession
To prevent harmful losses, your law firm must continue marketing during a recession – something easier said than done. You must create a marketing plan to help you take advantage of an economic downturn.
Assess your current strategy
First, you must assess your current strategy. You’ll need to determine which parts of your marketing plan are working and which need to be adjusted. Evaluating your current strategy will give you a clearer picture of your next steps.
Determine your goals
Since a slow economy means less money in people’s pockets, you may need to adjust your marketing goals. If increasing your revenue isn’t practical, you may benefit from focusing on brand awareness and brand authority.
Balance the budget
After assessing your plan, you should balance your budget. If you have any underperforming ads, you may benefit from reducing their spend and reallocating it to one that is performing better. Reallocation will help you save money and drive sales.
A recession is an excellent time to conduct more research on your clients, competitors, and industry standards from other fields. Learning more about your target market will help you better advertise to them, and using tools from other firms or professions can help you innovate your strategies.
Adjust your KPIs
Marketing during a recession will look much different from marketing during a period of growth, and your key performance indicators should reflect that. You may need to rethink your ideas of marketing success during hard times and modify your KPIs accordingly.
Lastly, you must foster resilience within your law firm. It can be tempting to slash or remove your marketing budget altogether, but staying resilient and sticking to your plan will help you get through a recession.
Speak to the experts
Marketing during a recession may seem counterintuitive to growing your business, but it can catapult your firm to the top. With less competition to grapple with, you’ll be able to stay at the forefront of clients’ minds and project stability.
However, marketing during a recession can quickly become challenging. Here at 8 Figure Firm, we’re here to support you through good times and hard times. We offer programs like Marketing.ONE to help you develop your marketing and ONE.Coach Premier to give you the support and insight you need.
If you’re ready to take your law firm to the next level, register for Marketing.ONE today. We’ll help you turn your law firm into a law business.