Three Strategies to Grow Your Business in a Down Economy
It’s rough out there right now for people and businesses between a global pandemic, the war with Ukraine and Russia, soaring gas prices, and falling tech valuations. Whispers of an impending recession are swirling and many businesses are reacting by cutting budgets, laying off employees, and putting projects on hold. Some say the current macroeconomic conditions could last two to three years, but data from the past shows that recessions have an average length of 11 months. So how can marketers best weather the storm and embrace a growth mindset in times of turmoil?
Here are three strategies you can use to keep your business growing in a down economy.
1. Laser focus on ROI and channels that perform
It’s a natural reaction when times get tough to tighten the purse strings and cut budgets, but as a marketer, you have to champion the channels that work. You’ve taken the time to put strategies and campaigns in motion. You’ve tested and optimized. You’ve analyzed. When you have to make tough choices and are forced to make cuts, focus on the channels you know will consistently deliver results and ROI. Also, consider the tactics that don’t put additional workload on your team with manual, time-consuming processes that will take away from their ability to focus on driving the business forward.
Marketing channels that convert consistently include email and direct mail marketing. 67% of marketers in the State of Direct Mail Report say that direct mail delivers the best ROI of any channel they use.
62% of consumers have been inspired to take action after receiving a direct mailpiece, and 72% read direct mail right after getting it from their mailboxes, showing that direct mail can help your business engage, connect with, and convert consumers in a noisy, digital-focused world. For brands that consumers don’t know, direct mail is the preferred communication channel, with 44% of respondents selecting this channel. Direct mail is relevant at every stage in the marketing funnel and an absolute must-have in your omnichannel marketing strategy.
“With each campaign, we’ve sent, we’ve seen a higher conversion rate and a lower cost per reactivation. Direct mail should be a standard part of our marketing mix and an always-on part of our automated campaigns.” - Marley Spoon
For years, marketers have discussed the importance of personalization and creating customer experiences. However, some brands are still limited to using a customer’s first name and calling it a day. The State of Direct Mail Consumer Insights Report cites that 52% of consumers expect personalized direct mail, and 49% see it as an effective way to build relationships with brands. In a time when getting data to power your marketing can be challenging due to data silos, capturing consumers’ attention with the personalized experiences they expect using limitless customization options for copy, images, promotions, and offers is easy. Research shows that images of previously purchased items, local events, or locations appeal to consumers.
"When we learned about Lob, where you can personalize direct mail just like you do email, we were excited as we’ve made a significant investment in email. We could take a lot of the data and what we had learned in email and bring that to direct mail. Sending postcards with Lob is way easier than working with an agency and sending them once a month." - thredUp
3. Invest in growth at every stage in the customer journey
Unlike the traditional linear marketing funnel of the past, today’s funnel has been flipped on its side with leads and prospects coming in and out at various stages so you need to ensure you’re using a variety of high converting channels.
It’s easy to ditch growth tactics and only focus on existing customers when times get tough, as customer retention plays a crucial role in your company’s ability to generate revenue and increase CLTV:
65% of a company’s business comes from existing customers: Not only is it more cost-effective to retain current customers, but these loyal customers are 60-70% more likely to spend with you
Current customers are 50% more likely to try new products and spend 31% more than new customers
Increasing customer retention by 5% increases profits by 25-95%
But, we would argue, don't ditch your customer acquisition efforts and only focus on existing customers. Growth is about getting new customers, not just getting more from your existing customers. It’s all about the balance. These customer testimonials say it all and show the impact of retention and acquisition direct mail campaigns:
"We tested a campaign and got immediate results with an ROI of 155%. Not only could it scale, but direct mail was profitable right off the bat." - iExit
Curious how iExit achieved 155% ROI? Find out by reading their case study.
“With intelligent direct mail from Lob, the Modern Health marketing team increased our registrations by 15-20% for those that received a custom direct mailpiece. We can now create, produce, and ship our direct mail campaigns more efficiently. We’ve also expanded the reach to audiences we couldn’t penetrate with digital channels. It’s been a massive win for the marketing team at Modern Health.”
“We’ve been able to drive additional retention and increase repeat orders. This has been a great initiative for us, and we’ve seen benefits across the business.” - Naked Wines
Direct mail is critical for retaining your customer base and acquiring net new customers—but it isn’t the only tool at your disposal. Use a combination of direct mail and digital marketing to keep people coming back. Be both timely and timeless.
Digital marketing and direct mail work best when paired together in omnichannel campaigns. By using the best attributes of each medium, you have a unique opportunity to keep growing and come out on top.
This blog provides general information and discussion about direct mail marketing and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.
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