December 14th, 2022 | 3 min
As recession looms over us and threatens the financial situations of both businesses and customers, it’s where we at Brave remember a phenomenon known as the ‘lipstick effect’. The effect occurs during times of global economic hardship, where sales of cheap luxury goods such as lipsticks increase, but why is this?
This is because people still want to get a feel-good uplift from buying something indulgent, but will do so without upsetting their financial situation. Lipstick is the perfect candidate for this; other examples include cheap gadgets or classy alcohol.
The key point that eCommerce brands can take away from this is that even in the hardest of times, people are still willing to spend on goods that aren’t totally necessary but give them an emotional boost. Sales may not dry up yet, and with the right digital marketing strategy, you could see a steady stream of customers looking to buy from your store. These are the ways to do so.
Recession marketing is focused on the long-term. Cutting your digital marketing budget during a recession will put you on the back foot when we come out of it, and those who rode it out will prosper when people finally have more spare income again. Plan for this period, and if you find that sales are depleting in the middle of a recession, don’t rashly throw your strategy away. Potential clients and customers aren’t always spending, but they are looking, and if there’s any wiggle room to keep the strategy going, press on and you’ll be at the forefront of customers’ minds once they find more money.
It could be beneficial to react to the recession with price adjustments. For high-end markets, this may not be the right move, but for other eCommerce businesses, consider making your products and services more affordable or offering reduced services in exchange for a more cost-effective price. This could inspire new sales and retain new customers who may come back for more once the recession ends.
Existing Customers are your Backbone
When times are hard, you turn to the ones you trust most, and for an eCommerce business, it’s no different. Look to your trusted existing customers and retain them as the core of the business rather than trying to find new customers. Especially with B2B businesses, do this by checking in with them on a personal level and keeping in contact, and consider offering a loyalty program that rewards them. Go the extra mile, and your clientele will be more cemented and will reward you once everyone is out of the trenches.
Sending the Right Message
Extending on from the previous point, you should bring the right message to those who were loyal to you before the economic downturn. The key is to ensure that customers are aware that you empathise with what they are going through, and if you don’t think they are, make plans to change that. The words you use will be crucial here, and you should favour more emotional wording to connect with them.
As we’ve seen during times of unrest recently, this can go wrong if you don’t treat every aspect of the situation with dignity and care. However, do it right and you can vastly improve your existing customer perception, which can will them into supporting you in return.
Brave Agency’s Digital Marketing Services
As the most experienced online marketing agency in the Peterborough and Cambridgeshire area, we at Brave Agency work tirelessly to figure out the right marketing campaign strategies for our clients to maximise brand perception, customer retention, conversions and long-term goals. Though times are hard, reaching out to our team today will give you a glimpse into what your company can achieve with a quality eCommerce marketing agency behind it.