Inflation may be slowing down, but it is still going up on a month-to-month basis. All the while, people are whispering about a looming recession and economic collapse. Needless to say, it’s a little scary to be a business owner these days.
The good news is inflation is temporary, and the economy has famously bounced back from worse conditions. Just think how far the economy’s gone since the Great Recession, where we enjoyed 128 consecutive months of economic growth (until COVID happened). But if you want your business to continue to succeed through economic instability, then you need to consider how you’ll tackle your marketing strategy.
Here’s a deep dive into how the right marketing strategy can help you thrive during inflation.
The Challenges of Marketing during Inflation
There’s no debate: Inflation affects small businesses. So what can you do to stay relevant and continue to build your revenue? Before we can answer that, you need to know the challenges you’ll face. Here are two of the most obvious challenges of marketing during inflation.
People Aren’t Spending Money
The most obvious issue: As costs continue to rise, the average consumer will not want to spend money because their purchasing power is reduced. Goldman Sachs estimated consumers had 10% less discretionary cash available at the beginning of 2022. That means it will be harder to attract new leads or even get your loyal customers to purchase your products as they reassess their financial priorities.
Your Production Costs May Go Up
Consumers aren’t the only ones who get the short end of the inflation stick. Businesses, like yours, may find that their suppliers are also increasing their prices due to inflation. Food prices alone have increased nearly 10%, causing many restaurants and food delivery services to have to hike their prices. If your industry has been affected by rising prices, that’s more money out of your pocket, which may lead to some hard discussions later on about raising your prices.
How to Adjust Your Marketing Efforts during Inflation
Knowing how much you should spend on marketing is never a simple answer, and inflation only complicates things even more. To simplify it, you have two overarching strategies for marketing during inflation: spend less or spend more. But which is the smartest play for you?
Double-Down on Marketing
This may surprise you: It’s not always a good idea to downsize your marketing plan during inflation.
Why? Because a majority of other companies are downsizing their marketing. So while your competition is spending less on their marketing, you can take the offensive and continue marketing at your usual rate. This approach may give you the edge while inflation persists, helping you come out on top when you get to the other side of it.
It’s best if you can pair this double-down strategy with a message that resonates with inflationary times. A Canadian pizza chain, Pizza Pizza, started marketing a fixed-rate pizza, promising a pizza price that stays the same no matter how bad inflation gets. This campaign expertly taps into the stress consumers feel about rising prices.
Cut Out Non-Essentials
If you think your industry will be particularly affected by inflation, don’t pull the plug on your top-performing marketing channels. It might be a good idea to pause your efforts on strategies that have a lower ROI.
Making data decisions is more important than ever. Look at metrics like ROI, ROAS, CAC, CPL, LTV, and conversion rates per lead source to determine your best-performing channels.
Don’t Cut Out SEO – A Defense
SEO is an interesting case because it is a long-term marketing strategy—it may take a few months for you to see the fruits of your SEO labors. So while it may seem like your SEO strategy is a low-performing marketing strategy, cutting funding for it can lead to a steep drop off of leads and conversion down the road. This can make it even harder to recover your business through inflation.
So don’t put SEO on the chopping block quite yet—there’s a reason why 77% of B2C marketers still prioritize SEO in their digital marketing strategies. We’ll dive more into why SEO is so essential a little later in this article.
Top 3 Practices for Marketing During Inflation
Aside from your marketing strategy (which we’ll dive more into later on), there are some business management strategies you may want to consider when navigating through inflation.
1. Prioritize Profitable Products
Consumers are looking for deals and promotions to get the most out of their dollar. If you have products that you know sell well, double down on promotional efforts surrounding those products. Give discounts, promotion codes, and anything else you can afford to offer. That way, you’ll know you’re investing time and money into products that have a good chance of turning a profit.
2. Monitor Your PPC Costs
Paid ad costs are on the rise. Google’s programmatic display CPM (cost-per-thousand) increased by 75% since 2021, while their CPC (cost-per-click) increased by 14%. If you’re not careful or aware of these price changes, your PPC strategy could be blowing a hole in your budget.
Make sure to seriously scrutinize the price of your paid ads. There is such a thing as spending too much on marketing, especially when paid media is involved. As inflation increases, so can the cost of your PPC ads. To help you keep the reigns in on your marketing budget, here’s a quick guide to budgeting with PPC costs.
Of course, for many companies, PPC is their top-performing marketing tool. So what then? Should you cut your PPC plan in favor of cheaper alternatives? Absolutely not. If it’s working for you, you have no reason to change course. But don’t set it and forget it either; make sure to check the cost of your PPC ads often to ensure they’re still delivering positive ROI.
3. Learn to Adapt
There’s no shame in taking a complete 180 on your marketing approach, especially during inflation. You may dive into a seemingly inflation-proof strategy, only to realize it’s not working a few weeks in. Don’t be afraid to experiment with different tactics until you find one that delivers the best results for your business. This may involve brainstorming new ways to boost revenue.
Top 3 Marketing Strategies That Work Best During Inflation
We don’t want to just give you some general ideas of how to grow your marketing strategy. While the above tips can certainly help, we know you want some concrete strategies to get the ball rolling. With that in mind, here are four marketing methods that can reveal how to thrive during inflation.
1. Marketing Automation
The whole idea behind marketing automation is that you can do more with fewer resources—a business model that is very inflation friendly. Automation makes your current employees more productive and efficient and even decreases the need for the number of employees you need to be staffed at a given time. This means you can have fewer employees who are stressed about how their wages are shrinking compared to the rising inflation.
When you build a functional marketing automation system, you automatically craft an optimized pipeline that takes a load off all of your employees’ plates and saves you money in the long run.
This is made possible by a variety of tools that are designed to save time, like:
- Email templates: Most lead nurturing emails look exactly the same, so why not create a template that can be automatically personalized to the recipient? Marketing automation helps you craft those templates and integrate them into a workflow that can automatically nurture your leads as they interact with your business online.
- List building: The process of creating a list of contacts to send your emails and newsletters to, list building is a great way to further segment your engaged audience. Say you want to promote a specific accessory that supports one of your products. List building helps you identify people who recently purchased that original product so you can send them an email blast to promote the accessory.
- Lead scoring: Lead scoring automatically places a numerical value on potential customers to determine if they are quality leads or not. Combined with list building, this strategy can drastically increase the effectiveness of your ad targeting.
We already plugged SEO earlier in the article, but that doesn’t mean we’re done talking about it!
SEO is such a resilient strategy during inflation because it is so cost-effective. SEO has a great return on investment—averaging a 275% ROI for eCommerce platforms. Plus, it is incredibly accessible that any business of any size can implement it.
You technically don’t have to pay a dime to leverage SEO on your own. Using free keyword research tools like Semrush or WordStream can give you plenty of insight into which keywords you should target in your content.
Once you implement your keywords into the right places (at least twice on the web page and in the metadata), monitor your web pages and keywords to see how they perform. It will take a few months to solidify your position on Google’s SERP.
3. Influencer Marketing
People listen to their friends about products much more often than they listen to companies. Influencers are a kind of in-between that can help you thrive. With the right influencer, you can target your audience, get them to recommend your products, and even offer discounts with special codes.
This helps you do a few things. For starters, you can more easily promote your products to those who otherwise wouldn’t consider purchasing during inflation. When your audience isn’t browsing eCommerce websites, they are browsing their favorite influencers’ pages. And if they see a good deal, they’re much more likely to bite.
Additionally, offering special promo codes through influencers can help relieve the financial burden of inflation. When leads see how much more affordable your products are with a promo, they won’t see it as breaking the bank.
How to Find Influencers to Work With
Not sure where to find an influencer that can promote your product? Here are a few ways to do that:
- See who your followers follow: Take a look at your social media followers to see if there are any influencers they already subscribe to. This is a simple, yet sometimes complicated, way to research influencers within your niche.
- Try HypeAuditor: HypeAuditor is essentially a search engine for finding influencers. It allows you to filter influencers by their demographic and target audience. It also flags potentially fraudulent accounts.
- Build a relationship with influencers: If you’re a small business, it’s usually not that effective to go right into a sales pitch. Wine and dine your potential influencers a little bit by sharing their content or joining in on the conversations they start with their followers. Laying this groundwork at the start will help you pitch your product later on.
Rely on Reliable Marketing Strategies
To summarize, perhaps the best advice we can give to help you thrive during inflation is to prioritize the marketing strategies that promise the most reliable results. Catchy jingles and flashy videos may catch people’s attention, but the ROI is usually nothing compared to the simplicity of SEO and marketing automation.
Want to learn more about these strategies? Talk to an expert at Big Leap today.