Inflation, Financial Instability and Marketing: The game is heating up!
It is no secret that inflation is a hot topic right now– not just with small businesses but with everyday home budgets as well. Data from MetLife and the U.S. Chamber of Commerce found that 85% of surveyed small-business owners expressed concern about inflation, and that 1 in 3 listed inflation as their top business concern. As if recovering from the economic shifts and supply chain woes caused by the pandemic wasn't enough, now there is a whole lot of talk about market instability, consumer spending, and increased costs of living—It can be overwhelming when you’re a small business owner already trying to keep up.
While it’s important to understand how inflation can affect your small business– it's even more important to know how to utilize marketing while it’s happening. The crucial thing is making moves that keep your long term business needs in mind. As monthly budgets get tighter with keeping up with rising costs, many businesses will restructure their budgets to keep up with the increased overhead. One of the first things you might think about cutting is marketing–but there is a big reason why this is exactly what you don’t want to do! Here are some things to think about when restructuring your marketing plans during this economic shift.
1. Things just got a whole lot more competitive.
Everyone is doing exactly what you are doing. We are not ever in an economic earthquake alone. As people are trying to spend less, the competition has now gotten a bit more intense for those customers spending money. Put your game face on, keeping your business visible is one of the most important things you can do right now.
If you retreat with digital marketing for instance, your competitors or larger companies will simply make themselves more visible to customers shopping for that same product– and you will not only lose out on that sale, but allow your competitors to increase their customer network, while you are sitting on the sidelines.
We get it, maybe posting to your social media account seems less important right now, or better yet, your friend has a kid who can do it, so why pay for a professional? Teenagers are good at social media right? They live on their cell phones. Wrong. The truth is, yes, it probably is possible to manage the actual post, but that is time you take away from actually working on your business, and oftentimes business owners managing their own accounts fail to consistently post often enough or with optimization because you’re busy running your business. Keeping up with good marketing strategies and managing content for your ideal target audience takes finesse and data utilization (which in a market this competitive is changing fast). Optimizing digital marketing takes not only experience, but data tracking and analysis. If you want to decrease your marketing spend, getting the strongest ROI possible is as important as ever.
2. If it’s easy, do it easy, if it’s hard, do it hard. Just get it done.
Many business owners, whether small or large, have recently seen an increase in conversion costs. Conversion costs refer to the total cost paid for an advertisement in relation to the success of achieving the goal of that advertisement. Basically, it’s costing more to get the result you want online.
Why is that? Well, it depends on what platform you have your ads running on. For example, on Instagram, your estimated action rates influence your conversion costs. The rates are measured by how users react to your ads or how likely users are to engage with your campaign. Typically, Instagram promotes ads that get more engagement and interaction from users - and the higher the engagement rates, the lower the ads cost.
Now, as for Google, your ads must go through a ranking system that typically displays Ads with high ranks. After running through the ranking system, Google calculates how much you will pay every time a user clicks on your ads. Google’s formula for measuring ad rank is: The ad rank of the advertiser below your rank / your quality score + $0.01 = ads cost.
Was that hard to understand? If you don’t feel like you can work those formulas to your favor, it might be hard to get good ad results when navigating the Meta backend. Basically, having your ad spend in experienced hands is not only important for ad performance, it’s also more cost efficient for your business. When the game heats up, you want the ball in the hands of a skilled player, right?
3. Goal setting is key. Don’t hit the court without strategic plays.
Many businesses make basic mistakes when budgeting for marketing that leads to wasted money and missed opportunities. A marketing budget is an important tool for understanding what you’re doing and how to get better results. There are many ways in which you can make your marketing budget more efficient and gain positive exposure for as little ad spend as possible.
We recommend being concise with your goals when it comes to ad spending. Think about what products are your highest priority? Are you launching any new products? Which of your products solve customers’ needs now? Which products would you still be spending on yourself in times of tightening? What will your customers find essential? Do you want to build your email list?
When you are working with a smaller budget you can typically only tackle one or two goals a month. So the most important thing to do is strategize what does your business need this month most? What sets your business up to outwork your competitors?
When it comes to your digital ads, you can make your ad spend reach further by choosing an objective that is not as expensive! Typically, purchase conversion campaigns have a higher cost per result than a traffic campaign. Email leads are more expensive than traffic (link clicks, landing page views), but less expensive than purchases. Sometimes, getting more traffic and retargeting later can be more effective than getting one or two purchases for the entire value of your ad spend. Or building your email list might allow you to market to that same lead more often via a less expensive channel like your email marketing platform.
You can consolidate your marketing efforts by evaluating which platforms get you the most conversions. Generally, social media ads will give you more bang for your buck. They are less expensive to reach your ideal audience than with Google Ads. However, if your product is unique, custom, or niche, or often service-based, or location specific, Google can be more effective than social media ads since you can bid on specific search keywords and phrases. It's important to consider your audience when selecting one platform over the other to make the most of your budget.
4. Don’t neglect your website. It’s your business’s kick off!
What is going on with your SEO? Why is SEO important during inflation? Well SEO is the process of improving your site to increase organic visibility for specific search queries and ding, ding– visibility is key as the game is heating up!
The goal of SEO is to improve the quality and quantity of traffic to your website through onsite changes. A great way to do this is by blogging! It is a fun and easy way to keep fresh content on your pages and can keep your ranking up with search engines. Also, asking your clients to give you reviews on your Google business profile and Facebook pages can set you apart from your competitors and help a new client decide to call you first!
As a small business ourselves, we understand how inflation and times of financial crisis can feel scary, but whenever there are big changes in economics– there is always opportunity. There will be businesses that don’t keep up, but your business can survive and even thrive during times of increased inflation if you play your cards right.
As marketing professionals, we understand how important consistent visibility is to your business for your customers and sales– but it’s even more important right now. Don’t fall victim to financial fears. You are a hard core entrepreneur, it’s time to suit up and get some digital elbows out, and climb past your competition. As inflation continues to increase, don’t think about decreasing your marketing budget, think about how to reallocate your spend and streamline your efforts to increase effectiveness and efficiency, so when people are spending their money, they are spending it with you.