Whenever there’s an economic downturn, brand budgets come into question. The last few years have been economically difficult, and unfortunately, that doesn’t seem set to change in the new year, leaving brands wondering how to market in a downturn.
A world economic situations and prospects report put out by the United Nations in June of 2022 reported that a fragile recovery of the economy from COVID-19 has been upended by the war in Ukraine. The repercussions are rippling throughout the world. Energy prices, food prices, housing, gas, it’s all up. Inflation is rising rapidly and consumers, investors, and businesses are all proceeding with caution.
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Many brands are slashing their budgets to ensure they can survive the next couple of years. But is this really the best plan of action? Is there a way to not just survive? Is there a way for brands to thrive through an economic downturn?
6 Ways to Thrive During Economic Uncertainty
1. Reallocate Your Marketing Budget
The hard reality is that brands do need marketing to continue growing at any time, never mind through a recession or economic downturn. But with the cost of traditional paid ads increasing and the ROI of said ads decreasing, many brands have been looking for alternatives, even without the current state of the economy.
It makes sense that as you approach your 2023 budget, you put paid ads under the microscope. In the next year, it’s going to be even more important to make sure you’re getting the best return on your investment possible. But even major brands are mixed on whether or not slashing their ad spend is the right thing to do.
The World Federation of Advertisers surveyed 43 multinational companies - including 5 of the world’s top 10 advertisers by spend. They discovered that only 30% of these companies have plans to decrease ad spending next year, with the other two-thirds either maintaining or increasing their investment in paid ads.
Without ads, you need to rely on other methods to get your brand in front of your target audience. That’s all well and good when you have access to a large budget to work from. But what about smaller brands who can’t afford to invest millions of dollars into advertising that may not result in a positive ROI?
While we advise taking a good hard look at your paid ad spend - we don’t recommend completely slashing your marketing budget for 2023. Instead, consider investing it in other forms of marketing that have been shown to increase return at a higher rate.
2. Trade in Ad Spend for Community-Led Growth
Word-of-mouth marketing is one of the best ways to increase the return on investment of your marketing budget. Brands use their communities all the time to get organic content in front of their audience. By investing time and funds in turning your customers, followers, and fans into ambassadors for your brand, you create an environment ripe for community-led growth.
What is community-led growth? It’s a strategy that allows your brand community to grow itself. Through a brand ambassador program, your ambassadors gush about how much they love your products online, getting the word out to their followers, friends, and family. The social buzz created by your ambassador community acts like ads, showing up in social media feeds and conversations, and keeping your brand front of mind for potential customers.
Even better, your ambassador community can recruit more members, increasing not only your customer base but the size of your brand community as well. This grows your brand’s reach and influence even further.
Does it work? Well, currently, word-of-mouth marketing results in an average of 5 times as many sales as paid ads.
3. Get More Content with Less Money
Content is king. Without photos and videos of your products, consumers can’t visualise themselves using your brand. But content isn’t typically cheap. You’re either holding photo and video shoots to get content featuring your products, or you’re relying on an outreach method like paying influencers to provide you with more authentic, casual content.
But just as you can use your brand community to drum up social buzz, you can use them to generate a ton of quality content.
While influencer marketing is a popular word-of-mouth marketing strategy, it shouldn’t be the only outreach marketing your brand does. Influencers can be a more expensive and time-consuming investment for a smaller return when compared to using a community of brand ambassadors.
For one, many influencers do single-post campaigns or a few posts over a short period of time. Rates are often determined by the influencers themselves, with costs ranging from $10-$100 for nano-influencers (those with under 10k followers) to $10k+ for mega-influencers (those with 1 million followers). For a single post.
Brand ambassadors, however, can result in hundreds of posts for a similar price point. They accept marketing tasks with rewards set by you - the brand. A brand ambassador program gives you the ability to set the rewards as not only cash but gift cards or freebies as well, further lowering the expense to you.
You can also choose to reward based on performance. For example, you may ask your brand ambassadors to create a post with the reward being $0.10 per like. So, yes, you may end up rewarding a few ambassadors $50-$100 for their single post, but that would only occur if they generated significant engagement, ensuring verified awareness of your brand.
4. The Value of User-Generated Content
Calling on your brand ambassador community is a great way to get more content for a lower cost than branded or influencer content. But beyond that, UGC is actually more valuable than branded content. And with distrust in influencers rising, it’s also becoming more valuable than content created by influencers.
84% of millennials don’t trust traditional ads. People want to hear experiences from real consumers, not from brands trying to convince them to make a purchase. This is why 79% of consumers claim that UGC highly impacts their purchasing decisions.
With a community of brand ambassadors regularly creating content showcasing your brand, you are able to build a library of photos, videos, and reviews that you can recycle on your social media channels and websites. You can even use UGC in your paid ad campaigns - further lowering the campaign costs and improving the ROI over using branded content.
5. Focus on Long-Term Growth with Your Community
Ambassador marketing is a long game. It’s worth investing time and energy into a brand ambassador program during a downturn. When the tides turn and the economy begins to recover, you don’t want to be just starting on building (or rebuilding) your community.
If you do, you run the risk of being drowned out by all the brands that prepared during the downturn. When consumers are ready to spend again, you want to have your ambassador community thriving or you’ll lose out on valuable revenue as you build.
Nurturing your community is essential during times of economic uncertainty. People are being more conscientious about their spending and looking to purchase from brands they trust. Nurturing and building trust with your community starts at all the points where people interact with your brand.
On social media, ensure you have an active Community Manager available to reply to comments and DM's and on your website, install live chat software to provide real-time answers to your customer's queries.
Brand ambassadors can also inspire that trust when they share posts about your brand online. As consumers become familiar with your brand, they’re more likely to return to your brand again and again. Especially if they have less disposable income to risk trying other brands.
Phone and fashion accessory brand IDEAL OF SWEDEN was struggling with their revenue at the beginning of 2022. By reducing their macro-influencer marketing to a core group of influencers and putting more focus on their brand ambassador marketing, they were able to recover their revenue and improve their ROI.
6. Use Ambassadors as Affiliates
Brand ambassadors don’t just spread the word about your brand. They can also act as brand affiliates. Using brand ambassador software, you can arm your community with discount codes and affiliate tracking links that incentivise them to drive sales in return for commission.
Creating marketing tasks can also encourage your brand ambassadors to become sales champions for your brand. Perhaps you offer a bonus reward such as cash or a high-ticket freebie for the first 3-5 brand ambassadors that hit a particular sales target.
Apparel brand Few Will Hunt employed this tactic when they challenged their ambassadors to make $1000 in sales. The first three ambassadors to reach the target would receive $100 in cash. 4 of over 90 participating ambassadors met the goal - and while the others fell short, they still generated revenue for the brand.
Fitness supplement company Body & Fit also use their brand ambassadors to generate sales. They often create tasks asking their community to share their discount codes for the brand on their Instagram Stories, which results in boosted revenue. As the task is fairly low-effort for ambassadors, brands using this tactic can offer gift card rewards or performance-based rewards, rather than a set cash amount, resulting in a higher ROI.
Survive Economic Uncertainty with Real-ationships
Economic uncertainty is scary. It’s scary for businesses and it’s scary for consumers. But it doesn’t have to spell disaster. By building genuine relationships with the people who care most about your brand, you can create an outreach marketing strategy that sees you through until the economy recovers.
With the uptake in consumers wanting to buy from brands that align with their lifestyles and values, one of the most effective ways to acquire and retain customers is by making them feel valued and supported.