By Perry Rearick, Chief Editor, Follow Your Buyer
We’re now in the second consecutive year of economic uncertainty. Or is it the third? Despite this pesky funk, there are some signs of improvement and talk among economists of a soft landing. Yet nearly everyone I speak with feels nervous and that is understandable. B2B companies are uncomfortable and nervous about revenue projections, B2B leaders are talking about cutting back on marketing budgets and B2B marketers aren’t feeling confident about their job security. The stress is smothering us and clouding our brains.
Will we experience a recession? Are we already in one? Let’s set that debate aside and assume yes to both of those questions. And let’s focus on what B2B solution providers and their marketing teams can do about it.
What does history tell us?
During periods of economic uncertainty, it is natural for businesses to trim costs as they try to reduce risk. Long term planning is paused, and companies tend to focus on short term outcomes that deliver immediate easy-to-measure results. Organizations look to reduce what they believe is unnecessary spending and often marketing finds itself on the chopping block. According to Tyler Turnbull, CEO of marketing communications company, FCB Global, “this strategy is wrong.”1
In 2008, I witnessed numerous life sciences companies significantly reducing or even eliminating their marketing budgets, to include laying off marketing personnel. At the same time, I saw a handful of companies increase their investments in marketing to include advertising. Over the next ten years these companies grew market share and significantly increased the distance between themselves and their competitors.
I know this seems counterintuitive, but history says otherwise. In 2019, Bain and Company studied the investment strategies of 3,700 companies. The organizations that invested in their products, services, and brands experienced 17% more growth than those that did not. And they repeated that growth with 14% on average in the years following the recession. Those that did not invest, shrank.1
Approach economic uncertainty like the Giro d’Italia
The Giro d’Italia is a multi-stage cycling race held mostly in Italy with six of the twenty-one stages in the mountains. It is considered a grueling race of attrition and those riders who do well in the difficult mountain stages often win the overall race.
Enno de Boer, Senior Partner at McKinsey & Company Inc., gets excited about recessions and believes they offer an opportunity for companies to grow and gain more competitive distance. He uses the mountain stages of the Giro d’Italia to illustrate what companies should do during recessions or challenging economic times.
During the easier, flat stages of the race, the cyclists tend to stay together, and competition is tight. But in the difficult mountains, like recessions, those cyclists who have invested in their conditioning gain distance on those who cut back trying to conserve their energy. When coming out of the mountains and onto the easier flat terrain, the cyclists who have fallen behind never make up the distance. De Boer urges businesses to view the struggles of an uncertain economy as an opportunity to create more distance between themselves and their competition.2
Turnbull also reminds us that over the last fifty years the average recession has lasted eleven months, and economists are predicting that any potential recession now may even be shorter. Strategies intended to mitigate the impact of economic uncertainty barely have time to take effect.1
Market your way through the mountains!
What does this mean for B2B sellers and their marketing strategies? Here are six things you should do.
Understand your buyer’s journey. Prospects will likely be feeling nervous about the economic conditions and like you, will be more careful when making purchasing decisions. This means they will spend more time in the early to middle stages of the buyer’s journey. This is before they are ready to buy anything or speak with a seller. Yet they will be accessing content to help them understand current issues, establish objectives, set strategies, explore options, and set vendor criteria. Whatever marketing strategy you employ must include communicating helpfully during the entire buyer’s journey, not just the features and benefits of your products or services.
Invest in customized market research. Whether you purchase standard market research or not, invest in custom research that will answer specific questions you have about the sentiments of your target audience during economic uncertainty. This will help you align your marketing content with those things that your target audience cares about now.
Invest more in content marketing. The early and middle stages of the buyer’s journey require marketing content aimed at helping your prospects before they are ready to buy. This means more thought leadership, white papers, advice in solving problems related to your solutions, and case studies. This kind of content builds trust among your prospects and when they are confident and ready to make a buying decision, you and your solutions are at the top of their list.
Advertise. In 2008 and 2009 I was responsible for advertising sales for several online publications that later grew into Life Science Connect. While many of our clients reduced or eliminated their advertising programs with us, we saw no decrease in reader activity. Our audience was as active as they were before the economic downturn. Those companies that advertised through the downturn continued to influence their target audiences and they emerged from that recession significantly stronger than their competitors that cut advertising.
Measure results differently. Far too many B2B solution providers in the life sciences space measure a single result, sales. During economic uncertainty, prospects spend money more carefully, and this can result in longer sales cycles and lower sales revenue in the short term. Instead, measure how your marketing content is engaging your prospects in a way that helps them advance through their buyer’s journey. How active are your prospects with your content? Are they sharing it with their colleagues? Are they reading about specific topics? And are they progressing from articles on best practices to case studies?
Increase your empathy when doing sales follow-ups. Many salespeople have a terrible habit of treating every contact they receive from marketing as a ready to buy lead. I have been guilty of this! Rather, you should modify your follow-up process to align with where the prospect is in the buyer’s journey. If the prospect happened to download an e-book on virtual clinical trials or attended a webinar on aseptic fill-finish best practices, it doesn’t mean they want to purchase those services. It does mean they have an interest in those topics, may have some follow-on questions, and could be interested in similar helpful content.
I’ve searched far and wide for a crystal ball that might predict whether a recession is near and sadly I could not find one. However, I am certain that we will continue to face economic uncertainty. History tells us that those companies that invest in their products, services and brands during economic downturns emerge significantly stronger than their competitors.
So, when faced with economic uncertainty, imagine you’re in the mountain stages of the Giro d’Italia. Give it all you have, and you’ll be far ahead of your competition when more certain economic conditions return.
- Turnbull, Tyler. “The Next 10 Months Could Determine Your Brand’s Next 10 Years”, Forbes, Jul 22, 2022, The Next 10 Months Could Determine Your Brand’s Next 10 Years (forbes.com)
- Davos Matters: Resilience. Enno de Boer, Gemma D’Auria, and Clarisse Magnin-Mallez discuss the importance of resilience. McKinsey Featured Insights, Video | McKinsey & Company.