With supply chain disruptions, the global pandemic, ongoing labor shortages, rising oil and food prices, and inflation surges, the U.S. is in an economic downturn that analysts claim may lead to a recession. Some people think we are already in a recession.
Consumers typically respond to tough financial times by spending less money, eating more meals at home, and skipping non-essential purchases. This change in consumer behavior may have detrimental effects on many businesses, even those in the B2B space. As a result, some businesses may evaluate their expenses to determine whether they can save in certain areas.
We understand that in challenging economic times, marketing departments may have to get creative with their dollars. To provide some expert guidance, we’ve outlined some digital marketing strategies and tactics that can help you pivot, and even prosper, in an economic downturn.
Increase Average Order Value
One way you can increase your ecommerce conversion rates and revenue in an economic downturn (or in times of prosperity) is to increase your average order value (AOV), especially if you’re earning less traffic to your website. Here are some tactics to increase average order value.
When someone is interested in purchasing a product, you can upsell by offering a similar item that provides more features. For example, if your product is a CRM or software program, you could provide multi-tiered subscription options. So if a customer wants to purchase the lower-priced option, you could encourage them to take advantage of the more significant benefits of a higher-priced tier.
Upselling can work even in economic downturns if you position the product as a better value than the original.
You can use cross-sells by offering your customers a related item with their initial purchases. For example, if your customer is purchasing a laptop computer, you could cross-sell a wireless mouse to go with it. Amazon does this frequently.
Depending on your platform, upselling or cross-selling can be as simple as installing an app.
Think about key points along the buyer’s journey where you’d want to cross-sell or upsell, such as your product pages or the checkout page.
You could bundle products and offer discounts for purchasing the bundle instead of one or two individual items. Online booksellers frequently do this. If you put a book in your cart, you’ll see other options appear for similar books, and if you buy them together, you may save money.
If you sell essential goods, product bundling can get customers to stockpile their inventory.
Free Shipping with a Minimum Order Value
Consumers like free shipping, and sometimes they will add another small item to their cart if it means that their order will be eligible for free shipping. In some cases, the additional item may make their order total less than it would if they paid full price for shipping and bought their order without the additional item.
Offer Free Trials for Services or Lower-Priced Options
Free trials or lower-priced services and products can be a great way to get consumers into the funnel. A free trial not only allows consumers to test the products, but they may determine that your product or service is an essential or something they can’t live without. If they love your product during the free trial, they may be less willing to give it up when it comes time to pay full price.
If your products are non-essentials, free trials or lower-priced options can help create urgency.
Offer Loyalty Programs
Ecommerce companies that use loyalty programs report an increase of 319% in average order quantity, according to a study by Incentive Solutions. While loyalty programs can encourage purchases among your customer base, you can also use these programs to collect new email addresses and other first-party data for future use.
Utilize Live Chat Support
Live chat support can improve your conversion rate, whether you’re a CPG brand or SaaS. If consumers have questions before making a purchase, they can get answers quickly with live chat. If you’re already price competitive, a live chat solution may help to prevent your prospects from comparison shopping.
Not only is it a helpful customer service tool, but businesses that offer live chat see an increase of 10% in AOV.
Make Website Functionality Improvements
If you’re unable to invest additional advertising dollars, improving your website is a tactic that will help you in the short-term and long-term.
To provide the best user experience possible, see if there are functionality issues that may negatively affect your ecommerce conversion rate. You could use a free tool, such as Microsoft Clarity, to gather information on user behavior patterns on your website. Analyze user behavior, run A/B tests and make improvements based on your findings.
This is a great way to reduce any friction and maximize the traffic you are getting to your website.
Focus on Awareness Advertising
Your customers may not be ready to make a purchase, but that doesn’t mean you have to stop marketing to them. Focus on top-of-the-funnel strategies so that you can stay top of mind with prospective customers.
For your PPC efforts, that may mean creating search ads that include empathetic messaging that instills trust in your brand. You may shift to more content creation such as creating blog posts, whitepapers, and information guides. Sharing this type of content is another cost-effective way to provide value even in a tough economic climate.
Maintain Some Advertising Budget If You Can
There is a competitive advantage to maintaining some advertising efforts, even in a recession. When your competitors are spending less, you may be able to gain market share or acquire customers at a lower cost per acquisition (CPA), which can have a direct impact on your revenue.
An economic downturn brings a new set of marketing challenges, but increasing your AOV, staying top of mind with your customers, and improving your website can help your business through a recession and beyond.
Need an agency partner that can help you market strategically? Want to make sure you are maximizing your marketing budget? Request an audit to see what is currently working and where there may be opportunity.
Or, you can reach out to our strategists to learn more about our services and how we can help.