Marketing During a Recession: What You Need to Know Blog Feature

By: Velocity23

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Marketing During a Recession: What You Need to Know


It's no secret that the current state of the economy has builders tightening their belts. One of the hardest decisions to make during an economic downturn is how to apply your resources. When it comes to budgeting, marketing and advertising come under careful scrutiny. How do you cut back on marketing during a recession without impacting your sales?

Let's dig into it...

There are a lot of signs that an economic recession may be on the horizon. Interest rates are on the rise and in many markets home values are declining. We're also seeing a rise in unemployment rates and there is a lot of volatility in the stock market. This all adds a lot of pressure on the home building industry. As such, marketers must prepare to navigate through this challenging time.

Here's how to make your marketing efforts more effective during these tough times.

Marketing and Advertising During a Recession

To survive a recession you must make sure you remain visible to your potential customers. When your cash flow starts to decrease, the only thing to reverse the trend is to sell more.

And we all know that marketing feeds sales.

First, you want to trim down anything that’s unnecessary. When it comes to your marketing and advertising spend, that’s not always an easy call to make. You must keep what's working and cut what isn't. But you mustn't stop advertising altogether.


But how do you market to people during a recession?

Understanding the Psychology of a Recession

During a recession, consumers think about money and evaluate purchases differently than normal. Their behaviour and feelings around their spending habits shift. They become more conscious and mindful about the costs of consuming.

For a business, maintaining consumer confidence is key to boosting sales. Remember, recessions impact people differently. Not everyone is affected by a recession in the same way. Luckily, people will always need a place to live. That is one advantage home builders have over industries that sell discretionary products or services.


When people are purchasing a home, they're making a decision rooted in security. They're focusing years down the road. They want to feel confident about their future. And they must have trust in the builder they're working with.

Are your marketing efforts promoting these messaging points?

The other thing we can do for our target audience is to be a source of hope and positivity. The economy is cyclical. Like the stock market, there are booms and busts. There are good times and bad. And although the current economic environment is tough, it will get better.

One thing you want to focus on in your messaging is that now is an excellent time to buy a home. With housing values dropping, getting into the housing market now is smart. There is a huge potential upside when values return to normal levels. Make sure to emphasize this with some tailored messaging.

A Stronger Position in a Smaller Market

The unfortunate truth of a recession is that the market is shrinking. Consumers are spending less and fewer people are buying homes. So that means you and all your competitors are competing for a piece of a smaller pie.

That said, the only way to keep a slice the same size you had before is to increase your market share. That means you have to sell more than you did before to maintain your business

This is difficult because the natural reaction to a shrinking market is to cut costs. But before you start slashing your ad budgets and cancelling your marketing campaigns, let's pause for a moment.

Using the slow times to set yourself up for success once the economy picks up again is a smart move. This is where marketing becomes an essential part of your growth plan.


There is a great opportunity right now to make short-term strategic plays that will help you grow your business in the long term.

Many businesses that have maintained their advertising or have increased their spending during hard times were able to come out on top as the new market leader once the recession ended.

Examples of this include:

  • Cereal Wars: In the 1920s, Post was the leader in ready-to-eat cereal. But because of the stock market crash in 1929 and the Great Depression that followed, they cut back their advertising significantly. While Post slashed ad budgets, their rival Kellogg's doubled its advertising spend and introduced a new cereal to the market called Rice Krispies. Kellogg’s profits grew by 30% and the company became the category leader, a title arguably still held to this day.
  • Fast Food Fights: Both Pizza Hut and Taco Bell took advantage of the decision McDonald’s made to drop its advertising and promotion during the recession in 1990-91. The result? Pizza Hut reported a 61% increase in sales while Taco Bell had a 40% increase. And McDonald’s sales? A reported decline of 28%.
  • Top Technology: Amazon sales grew by 28% in 2009 during the last recession. This included introducing a new product - the Kindle. As a result, on Christmas Day 2009, Amazon customers bought more e-books than printed books for the first time in history.

Your marketing is an investment in your business. The old maxim for investing in stocks is to “buy low, sell high”, and marketing works in a similar way. Investments made now while the 'market' is low will pay off in dividends later when things rebound.

Managing Marketing Investments

During a recession, marketing is not optional - It is essential to making sales.

Yet, company budget reductions often disproportionately affect marketing. After all, Marketing communication costs are easier to reduce than production costs.

Thus home builders must be careful in identifying what is necessary, and what is wasteful. While you might feel pressure to act quickly, the best advice is to s-l-o-w d-o-w-n.


Take some time to review your metrics and understand what is moving the needle and driving sales. Research what advertising spending options will help you achieve your long-term plans.

Here are some tips for managing your marketing investments:

Stay Balanced. Be Smart

Keep your advertising budget in order and ensure you have facts to back up your marketing investment decisions.

That means you need to keep an eye on your data. Metrics and statistical analysis become much more important when budgets are under pressure. The data will tell you what's working.

Make sure all stakeholders have access to your metrics. Share your insights across departments and broader teams so you can stay agile. Adjust your plans according to the trends you're seeing.

You can't prove the ROI of campaigns and services you're using if you don’t have the numbers to back it up.

Ensure Your Brand Voice Fits

Make sure your messaging stays on-brand and stay positive at all times. It's normal for the media to go negative. Bad news headlines sell. Recessions are amplified by fear. People are worried and stressed about the state of the economy. Make sure you're the positive light.

Empathize with your target audience. We know they're feeling wary. The idea of buying a home now can seem daunting. But buying a home isn't a 3- or 6-month decision. It's a 7-year (or longer) decision. There are many benefits of buying a new home during a recession so make sure you communicate those through your marketing.

Many marketers find it hard to stick to their brand when there's low economic activity. But you don't need to overhaul your brand identity right now. Tailor your messaging to your target audience and stay consistent with your advertising. You may not be selling a lot of homes right now, but your audience will remember you and how you made them feel.


If you pour on the pushy sales emails and non-stop promotions out of desperation to sell homes, you're going to lose ground. Focus on providing helpful information that's personalized and relevant to your buyers. Stay welcome in their inbox and social feeds.

That way, you will be front of mind when they're ready to take the next step. And that puts you WAY ahead of the competition. You know, the ones who put all of their ad spend on hold?

Focus on Brand Trust

We get it, you're not a huge brand like Nike or Apple, with millions in budget to run feel-good branding campaigns.

But that doesn't mean you should stop advertising.

Most businesses start looking for ways to cut their advertising budgets when economic downturns hit. But not you, savvy marketer!

This is a perfect opportunity for you to bring in some new and creative messaging ideas. Have you been wondering about a new email campaign tactic? Now's the time! Look at other ways you can connect your brand with your audience. Post interviews with happy homeowners, and go behind-the-scenes with your team.

Check out this example from Copper Builders in Charlotte, NC:


Make. It. Personal. Help your audience to create that emotional connection with your brand.

Remember, people buy based on emotion and justify it with logic.

Emphasize Your Core Values and Focus on the Family

During a crisis, people fall back on what’s most important to them, which usually means family first. This is a great time to reinforce those values by meeting your target customer where they are. Provide helpful content that’s relevant to their situation, rather than pushing sales.

For example, you could publish content about creative ways to save money, buy smarter, and make things last longer. You can share ideas about ways to have fun around the home without spending a lot of money on entertainment. Your audience will appreciate anything that will make their lives easier and distract them from the negativity.

Don't Overreact to Temporary Downturns

What we mean is stay consistent. These days, people are so bombarded by one ad campaign after another that they need 20+ touch points with you for it to register.

So rather than drastically shifting your marketing for the short-term, stay focused on your long-term goals.

People don't buy a new home in a weekend; it's not an immediate purchase. The home buying journey can span many months and even years depending on the type of buyer and what stage of life they're at.


Your marketing should be focused on lead generation and lead nurturing.

You and your marketing team should be focusing on creative ways to capture new leads. What would help your ideal buyers make a smarter and more informed buying decision? Premium content like guides, workbooks, cheat sheets, comparison charts, and content that answers questions are perfect for this.

Then come up with email campaigns that continue to provide value at least once a week over the long-term. And by long-term, we mean for six months or more. You want to pop up in their email inbox as a welcomed guest every week just to say "We're still here! We're still providing value! We're here when you're ready!"

Look at your customer needs’ and deliver information that helps satisfy those needs. Money-saving tips are always a good topic. What about offering some long-term value by explaining how an income suite could make a big difference in their monthly budget?

Recessions come and go, usually only lasting about a year. But there's always going to be consumers out there. This isn't the first recession you've experienced in your life and it won't be the last. The way to stay in business long-term is to market to people in a way that they feel adds value to their life. It's NOT by cutting your advertising when things are tough.

Pivot – But Don't Abandon – Your Media Plan

It bears repeating: media budgets are often cut in recessions.

Marketing expert Peter Field said, "Brand advertising is not about profiting in recession, it is about capitalizing on recovery."

And that's the key point to remember. You should be focusing on the long term and always adding value.

Be selective with your promotional and sales emails. Only send these types of emails to your contacts that you know are actively buying. Avoid the segments who are still information gathering.

The best way to do that? Ask permission to send promotions to them. Seriously, this is so effective it's almost ridiculous. Send an email that says "Hey we have an awesome new promotion coming up on some select models or quick possession homes. Are you interested in hearing about it? If so, click this link and we'll put you on the interest list. If not, just ignore this email and we won't bug you about it!"


That's marketing to people with respect and people love that. And the best part is when someone does click the link, they're totally expecting to be "pitched to" so shoot your best shot!

If you've been thinking about trying a new media platform, this may be the time to do it. It's likely your competition has pulled back, so you have a chance to get in front of more consumers with your message. It also gives you a chance to play and learn without spending a lot of budget. And because you’re building your audience during a “slow” time, you know they’re interested in what you have to say. Plus, it will help your long-term game when you’re ready to put some more investment into it.

But whatever you do, don't abandon your tried and true media platforms. Email for example, while many marketers feel it's 'boring' is still the most effective marketing channel bar none. They're still reaching consumers, even if there aren't as many of them right now.

What's important is to focus on that age-old piece of wisdom: quality over quantity. Make sure your message is on point and that you're targeting the right audience. A smaller number of engaged consumers is better than a huge list of uninterested ones.

Adjust Your Pricing... Cautiously

This strategy may seem obvious, but we still want to address it. Naturally, just like in previous recessions, people have less money to spend and are less willing to part with it.

In this case, you might find that your usual pricing tactics become less effective. You may also see promotions that historically had great results now fall flat.

Price sensitivity is a real thing, and many brands forget that it can have a long-term impact when it comes to the recession recovery period. You don't want to be one of those types of marketers.

When it comes to promotions, try focusing on cash back or discounting rather than adding extras or upgrades. You might find this approach works better during the recession as you're making it easier for people to get into a new home instead of piling on extras if they buy at the normal price.

Depending on your situation, it might make sense to take sales with less margin than holding out in hopes of a larger margin. Less cash in hand today is better than the chance of more in hand next month.

Upgrade Your Technology

Doing more with less should be a constant focus in your business. But during a recession, this becomes even more important. Looking at investments in technology can make a huge difference.

In the last couple of years there have been huge advances in technology around automation, A.I., and machine learning. These can have a profound impact on your business.

For example, an investment in the right automation software can mean not having to hire more staff. You can create incredible automated workflows to help your current team work more efficiently and do more in less time.

Machine learning can help you deliver your marketing to people exactly at the right time on a hyper-personalized level. That means people actually see it, rather than it getting lost amongst a sea of other messages.

A.I. tools can optimize your marketing messages greatly increasing their effectiveness. It's pretty hard to write better ad copy than a machine that's analyzed over $300 million worth of winning ad copy!

Embrace technology. In our experience, the home building industry has been slow to adopt new technology and those that do are winning big.


Data Collection and Management

Modern marketing is much more science and much less art and creative. Technology advancements allow the modern marketer to collect data and make decisions with statistical accuracy. And the best part is this technology is more affordable than ever.

Today's technology and software allow you to collect first-party data from people interacting with your website. We can gather information about the home models they like and what their interests are based on their activity on your website. Each time they browse a new page, click on a link, or download a new resource we learn a little more about them.

One of the most important uses of this data is being able to profile your buyers and create segments in your contact list. This gives marketers a huge advantage. It allows us to craft hyper-targeted messaging campaigns to specific groups of people.

This is important with all the changes happening around privacy rules lately. Platforms like Facebook and Google have begun to restrict access to third party data - something marketers have forever relied on for their marketing campaigns.

Research Your Customers

Whether you're collecting data in-house or using the services of advertising agencies, this data is useful. You can use it to create more accurate buyer personas which helps you do even better marketing.

This is important during a recession when you need to understand how your buyers are redefining value in response to the market.

Collecting data also allows you to remain agile. Running A/B tests and using data analytics allows you to improve performance. It helps you adjust tactics as needed in response to shifting market conditions. It gives you the ability to test different campaigns and update your messaging based on what people are responding to.

By carefully refining your messaging, you're able to demonstrate empathy and your brand becomes a trusted and relevant voice (we talked about that earlier, remember?).

When it comes to marketing in an economic downturn, finding innovative ways to do more with less will help you stay competitive.


Don’t Cut Your Marketing

It’s natural during hard economic times to want to cut back your spending. If sales are slow it’s tempting to save money by cutting back on advertising. But with less visibility comes fewer leads. And fewer leads means less sales. And ultimately that means you'll lose market share.

Marketing is an exercise in memorization. People need to be reminded regularly that you’re there and can help, otherwise, they forget about you. Your best course of action is to focus your marketing around measured lead generation activities. Track what campaigns and tactics are generating new leads and for how much.

Then put those leads into a long-term nurture campaign to deliver value and stay front of mind. Uncertain consumers look favourably at familiar brands.

Companies that increase marketing activities during a recession see much larger long-term gains. It's likely your competition will be cutting back on their marketing efforts and by increasing yours, you'll gobble up market share.

There is no doubt that marketing during a recession is hard. But if you stay consistent, zig when your competition is zagging, and focus on being effective with your marketing, you'll get through this. It's gonna be a slog, but if you follow this advice you'll come out strong on the other side and be poised for rapid growth.

And remember, we’re always here to help. Book a free strategy session to talk about how your company can be better equipped to work through and recover from the recession.

Originally published June 5, 2020; updated November 10, 2022

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About Velocity23

We help home builders and developers upgrade their marketing, sales and operations processes so they can grow and scale their business, and sell more homes.

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