A Marketer’s Guide to Preparing for an Economic Downturn
Editor’s Note: I sat down with Bill Anderson and we discussed how an economic downturn can affect B2B marketers and their organizations. In this conversation, these are the insights that were shared.
Can you explain how an economic Downturn affects B2B Marketers?
When there’s a downturn, marketing and advertising budgets are typically the first things to get cut. This leaves marketers severely resource-constrained, and many times a good portion of their team will disappear without any warning. Marketers are seldom prepared for this — their projects lose resources midstream, and no one is picking up the pieces.
Is there something marketers can do to prepare for a downturn?
Yes. Marketers can cross-train their people. In many cases, if you are anything less than a VP, you don’t have much say over who is going to be laid off. In some cases, you may give suggestions, but I’ve seen in the past where even some of your top people get the ax and there’s no good reason. You should have everyone on your team talk about what they are working on, what stage they’re at, and what problems they face.
Can you explain what you mean by ‘cross-train’?
You may have specialists, but they should be actively learning other skills and working in other areas in order to be more valuable. If someone is let go, your team can continue. You also provide them with a broader range of skills that help them get work once they leave your company.
This should not actually be done in the face of a recession, but it should be ongoing as a regular part of running your team at all times.
Once a downturn has happened, what should marketers be doing, whether they are in their same position or whether they have been laid off?
When a recession comes — placed ads, sponsored content, and basically all outbound marketing becomes a real luxury since they typically will be cut from the budget. You need to dial-up inbound. It’s all about attracting people and managing them once they come in. If you are reporting on vanity metrics like the number of likes and the number of views, that’s the kiss of death. You should be reporting and tracking revenue. Anything you report that isn’t deliberately contributing to revenue is undermining your case and your value as a marketer in a recession.
Do you think a recession affects marketers differently or more than other groups such as sales or finance?
Yes. In most cases. The reason is that marketing is often viewed as an expense. Think of it this way: you need accountants, you need lawyers, you definitely need sales (they may get less commission but you need them), and you don’t necessarily need marketers — particularly the ones who aren’t contributing to revenue. They’re just an expense and they’re the first ones to get cut.
Do you think that’s the right thing, to cut marketers first, or should there be a new way to look at it?
If they’re not proving their worth, then it’s no surprise they’re on the list. And [proving worth] that’s what revenue marketing and marketing automation does, it takes marketers who went from buying advertisements and being an expense to being someone who directly contributes to revenue. And the more revenue you generate, the more important you are in the organization, and the greater the likelihood of keeping your job.
Do you think this will be happening soon? Should we watch out?
Oh hell yeah. I think it’s coming sooner than you think. If you look at this graph, it’s the S&P since 2006, just before the last big recession of ‘07 and ’08. You can see it steadily grow, but then in the last few quarters, you can see the chaos so it’s not looking good to me. And I have another thing which is called the Maserati coefficient. I’ve noticed in the last few weeks in my town, and I live in a podunk city in a small rural state, and I saw 2 Maseratis this week. That means a lot of people have a lot of money and that’s going to pop soon. I saw that in the dotcom boom where everyone was driving expensive Porsches and Ferraris and in a year it was gone. A bit scary.
Any other wisdom you could shed to marketers preparing for a recession?
Yeah. In many cases, intelligent marketers often survive and even grow because you know how to talk to an executive in ways they understand and can act on. That means you’re framing everything in terms of the value of the business and you’re also not just bringing ideas, but you’re bringing something they can act on. You have to assume the stoic idea: imagine the very worst and everything beyond that is a positive. Those that prepare to win, and those who don’t are blindsided.
Here are some takeaways from our discussion on B2B downturns:
- Assume and prepare for the worst. Cross-train your employees for both their benefit and your team
- Prepare to talk about the right things (metrics, tactics, and financials, not vanity metrics)
- Strategize for a marketing recession (inbound marketing, relying on the right metrics and how to work with the remaining sales team)
- Manage for a recession (how to talk with executives, how to train the remaining sales and marketers and show that it is a benefit)