Talking about a recession isn’t always enjoyable. But it’s a situation that inevitably requires a shift in strategy and mindset to continue finding success in the face of economic headwinds.
Defined technically as a period of a significant decline in economic activity, a recession (and the looming potential for one) directly affects marketing.
In particular, B2B marketers face a unique challenge in identifying a downturn – with sales cycles expanding beyond 6, 12 or more months into the future and lacking evident shifts. Whereas, B2C and D2C marketers can feel it more quickly when complete verticals go south.
In this article, we’ll unpack how a looming recession impacts B2B marketers and the key factors to consider to successfully navigate this landscape.
What did B2B marketers do last time?
You must know the past to understand your present and future. There have been plenty of recessions – some fairly recently.
In 2007–2009, we experienced the Great Recession in which the mortgage crisis led to the collapse of the housing market bubble. While it may have ended for the U.S. in 2009, the ripple effects were felt in some European countries for years.
Countries defaulted on their national debt and had to be bailed out by the European Union, resulting in those countries enacting austerity measures to repay their debts, according to History.
Hindsight is 20/20. And when it comes to learning from past mistakes, there’s a clear connection to be made between:
Those who increase (or at least maintain) advertising budgets.
And those who cut or stop marketing efforts altogether.
When faced with a potential downturn, brands that committed to advertising and marketing efforts rebounded faster and recovered quicker than those that opted to pull back.
During the 1990-1991 recession, McDonald’s decreased its advertising and promotion budget, while Pizza Hut and Taco Bell did the complete opposite, according to Pathfind.
This allowed Pizza Hut and Taco Bell to increase sales by 61% and 40%, respectively, while McDonald’s saw 28% fewer sales.
What do B2B buyers want now?
COVID-19 is one key element that differentiates this potential recession from the others.
We just experienced a global pandemic that permanently altered the entire spectrum of consumer and business decisions.
As a result, we will need to navigate key shifts in the B2B buyer behavior and landscape.