I know we’ve been talking about an impending recession for a while—and, for the most part, the U.S. has been unscathed by it. But economists are now saying we won’t get through 2023 without one.
Many businesses feel that consumers are becoming more careful about how they spend their money—for the first time since the pandemic put us all in lockdown. Inflation numbers keep rising, the war in Europe continues, and banks keep failing and no one knows if or when that will end. OPEC just announced that they’re cutting production, which means gas prices are about to soar again.
All of this points to a recession we can’t avoid this time.
Because this is a blog about communications and not the economy, you’re probably thinking to yourself, “OK, Gini, I get it. But what does this have to do with me?”
Everything. It has everything to do with you.
We’ve already seen massive layoffs in the tech industry, which is a leading indicator of a recession. If it hasn’t already, that will start to hit Main Street businesses next. I can’t tell you how many clients we’ve been working with the past few weeks to ensure their layoff communication is done well and not “pity city” terrible.
What comes next is a reduction in marketing and communication budgets. Your resources are about to become thin—and you’ll have to do more with less (my least favorite phrase from The Great Recession).
Some Marketers Have Already Seen Budget Cuts
A survey from HubSpot shows that marketers are already seeing budget cuts, hiring freezes, pivots to their plans, and more. More than three-fourths (78%) say the recession is already here—and 67% expect it to last longer than six months.
Aside from layoffs in the tech industry, marketing and communications is a leading indicator of a recession. Many executives are watching what’s happening globally with a war, oil production cuts, supply chain issues, and inflation, and they’re tightening their belts. The first thing to get reduced is marketing. Always.
The same HubSpot survey also shows that 80% of marketers are preparing for a recession and are making cuts in paid media and shifting investment around.
Last week, a client called me and asked my opinion on how to incentivize his marketing team to generate more leads. He said they’re tightening their belts, too, and need to get more qualified leads from every part of the organization, including marketing and communications. We had a long talk about how challenging it is to measure brand awareness and top-of-the-funnel activities (communications) to sales. At the same time, he can’t afford to continue to pay those people on his team if they aren’t proving ROI. We crafted a plan that makes him happy (for now) and doesn’t put his team in a spot where they can’t deliver.
Unfortunately, I have had many similar conversions with several clients in the past few weeks. We’ve also been working to help them communicate layoffs, in some cases, and in others, they’re looking for more qualified leads in shrinking markets.
Agencies will be next and I’ve already begun to prepare my team for the inevitable. Once the layoffs are over and the work internally has been rejiggered to provide the biggest bang for the buck, CFOs will look at the biggest line items on their profit and loss sheets. Agencies represent a pretty big expense that is easy to eliminate with one phone call.
Now is when our efforts must be undertaken in the most economically efficient way possible. The tactics that delivered a so-so return have to be abandoned—no more testing things out. Now is the time to focus only on what we know works. And, if you aren’t already working with sales to best understand how your efforts affect their leads, now is the time to start that process. If the sales team says they can’t generate qualified leads without your help, it’ll be A LOT harder for you to be laid off—internally or externally.
So They Must Work Directly With Sales
Last year, we started working with a client to build their awareness and thought leadership, while also producing qualified leads for them. We, of course, are using the PESO Model™ to do this—and, no surprise, it’s working!
We started with a podcast and blog—content that didn’t exist—and then we moved to email marketing, lead nurturing, and search engine marketing. We also began optimizing their website so they would actually appear in search.
All things that make sense, right? Then I personally set about developing a personal relationship with their VP of sales. Based on previous experience, I knew that without that relationship, all of our work would either go unnoticed or we’d be told that all of the leads we generated were done by sales and we didn’t have a hand in it. Working directly with the sales leader and ensuring we trusted one another was my first priority, as the leader of the business.
I knew it was working when we were in a meeting with leadership and he said, “Gini and her team have influenced $300,000 in new revenue this quarter.”
In my entire career, I’ve never had a sales leader give us credit like that. They always take credit and act like we had no hand in it. I give a lot of credit to the person this particular sales leader is, and it wouldn’t have happened without the relationship I’ve built with him.
This is the most important thing you can do in good times, and it becomes critical during economic downturns.
To Generate 200% More Leads
A recent Chief Executive article titled, “Align or Decline in 2023: Recession-Proofing Sales And Marketing” describes this very thing.
They say, “CEOs are responding to recession fears by asking their CMOs to double down on demand generation, the latest Chief Outsiders Survey of CMOs tells us. CMOs are (or should be) well-equipped to lead their teams in this effort, but they will be significantly hindered when marketing and sales teams do not work in tandem. The alignment between both groups is also essential in “peacetime,” of course, but the need is even more urgent in the scenario of an economic downturn.”
This is a new concept for communicators. I know that. Work with sales? What do you mean? My work can’t be measured directly to sales. Yes, and… remember the client I told you about who called me last week to get some help figuring out how to incentivize his comms team to produce results that can be measured to sales?
This is where we are, whether we like it or not. If you want to survive a recession and continue to grow in your career, you have to figure out how to measure your work to sales by working directly with the sales team.
When you align well with your sales brethren, the revenue growth generator kicks into high gear and you’ll be able to pinpoint exactly where leads are coming from, what is nurturing them, and what helps convert them.
In fact, a study from LinkedIn found that when sales and marketing and communications teams work together, they can generate 200 percent more revenue due to their collaboration.
Two hundred percent!
This is the exact kind of data you want to have when it’s time for leadership to think about layoffs or letting their agencies go.
And Become Recession Proof
Here is how it works: you and your team know how much it costs to generate leads. This might be through what you’re spending on a PESO Model program, including both organic and paid spend. In this case, your organic spend might be a portion of the salaries of your team and what you’re paying the agency. If you’re on the agency side, it’s the budget you have for the client.
You’ll take that number and determine how many leads you generate. For instance, the client I mentioned a few minutes ago? We know it costs $6 per lead, $54 per marketing-qualified lead, and $127 per sales-qualified lead. The revenue they generate from a sales-qualified lead is an average of $25,000. They will pay $127 all day long to get a $25,000 customer.
Before the start of every quarter, have a conversation with your sales team counterparts to understand what their goals are for the next three months. Then you can use math (I know, I know) to figure out how many leads you need to generate to help them reach that goal.
Of course, you aren’t responsible for 100% of those leads, but if you work together, you’ll be able to achieve the company’s revenue goals.
This is recession proof. Companies almost never let the sales team go during rough times. If you have built a program where you are so closely aligned with sales that they can’t reach their goals without you, you will survive cuts, too.