When the market is in decline, the advice from investors and stakeholders is always the same.
“Cut sales and marketing!” They say.
“Brand building can’t be measured, so why are we investing in it?” They say.
“Why spend on a trade show when we can send cold outbound emails for free?” They say.
This advice is dated, reactionary and impractical. And according to TechCrunch, it’s flat out wrong. VC-backed SaaS startups that didn’t cut sales and marketing budgets were in better financial growth positions than those who did when the market dipped in 2022.
This is a vast departure from the advice often given by investors, so how can it be true?
Marketing is often considered non-essential, hard to measure and future oriented. But in reality, marketing helps future buyers know that you exist, see how you’re different and ultimately buy from you.
Investors and founders want the same thing: a cost-effective product with market fit and the potential to be market leading and acquired. Brand, product marketing and go to market (GTM) activation play a very strategic and important role for your startup to achieve those goals. Here’s why.
Brand strategy sets you apart from the competition.
A strong brand is memorable and tells customers exactly what position you hold in the market.
Brand touch points cement your product in the minds of future buyers. If a customer is ready to buy and they start thinking “who do I buy from,” you’re already being ranked against your competition. Instead, be a brand that resonates with your customers so well, they don’t even have a chance to think about the competition when it’s time to buy.
If you wait until a recession is over to begin your foundational brand strategy assessment, you’re way too late. A competing product will already be well underway.
Product marketing turns your product from “nice to have” to “must have.”
Could your customers live without your product? Great product marketers translate your product features into stories that appeal to your customer’s needs and wants. One of the leading indicators of a market declining is consumer spend and credit. At some point, consumers (and businesses) will ask themselves “do I really need this?” Your product marketing can make them think “yes” through compelling messaging that speaks to their pains.
Both your brand strategy and your product marketing strategy can help you empathize and resonate with existing customers during a difficult recession. It creates a sense of loyalty that will outlast a recession for years to come.
To capture market share and get ahead, go to market where others don’t.
We’ve seen recessions before, so let’s look at examples of how this worked in the past.
In the 1990s, McDonalds reduced advertising spend and subsequently, Pizza Hut and Taco Bell increased theirs. What happened? Pizza Hut and Taco Bell ate up all the ad spots McDonalds no longer held. Sales increased by 61 percent and 41 percent respectively, while McDonalds’s dropped by 28 percent.
There are only so many Super Bowl advertising spots available. When someone doesn’t renew their contract, another brand can take over. And while you may not have a Super Bowl-sized ad budget, the example should explain the point.
Not only can you grab market share in a recession, but you’re also creating future air cover to prevent competitors from creeping in on you. At the end of a recession, a new product may emerge. But if you’re strategic with your marketing, you’ll already be so far ahead that the competition can’t catch up.
Recessions can be both challenging and rewarding. They present learning lessons for businesses looking to come out the other side.
When everyone else goes left, this is the time to go right.
- Investing in your brand strategy helps you visually differentiate from your competition.
- Product marketing helps your buyers see you as essential, not “nice to have.”
- While competitors pull back from go to market activation, lean in and claim market share.
Ready to maximize opportunity, now? Learn how our product experts can help.