In the midst of global economic downturn, what do small enterprises anticipate? Find out the results of our study and get suggestions for how to develop a strategy for communication that can help your business thrive, even in a down economy.
One of the most noticeable effects of a recession is on the smaller businesses. As the economy worsens, it affects people and businesses in numerous ways. When the economy is bad, it can be especially difficult for smaller companies to stay afloat.
One reason for this is that cash flow is usually tighter in smaller businesses. Inflation, increasing energy costs, and supply chain disruptions all hit small firms harder than larger ones. When times go tough, the marketing budget is often the first thing to go in a small firm.
For our latest analysis, “Email in a dynamic economy,” we polled businesses of varying sizes all over the world to learn more about their email-sending habits. Based on the data, we know that 15% of companies with fewer than 10 employees have reduced their marketing expenses, and another 13% anticipate doing so during the next year. This is in light of the fact that an increasing number of analysts believe a global recession will begin in 2023.
Yet the prediction isn’t entirely bleak. Let’s dive into some of the report’s most useful takeaways for promoting local businesses.
Focusing on marketing from the perspective of small businesses
Almost 1,300 people responded to our poll between August and September of 2022. Hundreds of people were counted in this category since they worked for companies with fewer than 10 workers. This is a rare chance to study how the SMB sector is preparing for the impending global economic downturn.
In this article, we’ll examine the results of small businesses in the following areas.
When it comes to the economy, what are the main worries of local businesses?
If the economy slows, how will this affect the marketing expenditures of small businesses?
What channels will have the greatest effect, and which ones may be cut, when it comes to advertising for small businesses?
What kinds of email sending habits and email marketing strategies do small businesses prioritize?
What’s the silver lining in this stormy global economy, if any, when it comes to marketing opportunities for small businesses?

The Economy

Regardless of who you are or where you work or reside in 2022, inflation is likely to be at the top of your thoughts. In our research, we outlined 11 potential economic risks that could affect companies in the coming year. No matter how we broke down the data, inflation was always the dominant factor.
Inflation was chosen by 58.5% of those polled who work for enterprises with 10 people or less when asked to choose up to three of the major economic difficulties facing the country in the coming year. In addition, 45% of the firms surveyed said that lower consumer spending was the biggest factor, while 27% said that rising energy and transportation prices were to blame.
Comparatively, respondents with fewer than 10 employees were more likely to choose Inflation, although decreased consumer spending appears to be a much bigger concern for small businesses.
While spending on consumers ranked highly across all business sizes, small businesses saw at least a ten percentage point increase in responses for “Reduced consumer spending.”
As prices increase and the economy slows, local small businesses may feel the effects of consumers’ reduced spending. It could be difficult for smaller businesses to handle increased costs, and customers could select for the least priced choice.
Yet, we mustn’t overlook the contribution that small enterprises provide to our communities and economy at large. The U.S. Small Business Administration (SBA) estimates that small businesses account for 44% of U.S. economic activity and, in many cases, make local neighborhoods better places to live. We need people to provide money to small businesses because we can’t survive without them.

Budgets for advertising

As a result, will expenditure on advertising by small businesses be reduced in 2023 if customers reduce their outlays? As we’ve shown, 28% of the smallest businesses in our study have either planned for or implemented decreases in their marketing budgets.
Our survey also revealed that over 20% of small businesses want to boost their marketing budgets during the next year. An additional 40% of marketing expenses are not expected to change. There was also an element of mystery: in 2023, 12% of small businesses weren’t sure if they should reduce their marketing spending.
While this is still positive, it is somewhat lower than the norm for this type of poll. Around 20% of smaller businesses plan to boost their marketing spending in the coming year. Also, the SMB sector was the most likely to report moderate to severe failure with its digital communication plan.
Regardless of the state of the economy, the small businesses that are willing to keep pouring money into advertising will find ways to keep their names in front of consumers’ minds. No company wants to fade into obscurity, yet that’s exactly what can happen if marketing efforts are neglected. Instead of giving up entirely, you should double down on your most successful marketing strategies.

Insights through Email

Email marketing was the most likely channel to produce a good return on investment (ROI) during a recession, narrowly edging out digital advertising in the overall poll. When we looked at the smallest businesses in our sample, however, email fell to sixth place.
While over half of all respondents saw email as a channel with a positive return on investment (ROI), just approximately a third of organizations with fewer than 10 employees shared this sentiment.
It could be time to rethink your email marketing approach if it isn’t producing the results you need. Email has the potential to be a highly effective medium with quantifiable outcomes. While email marketing is inexpensive, it does require some strategic thinking and creativity on your part to reap the full benefits.
Less emails don’t seem to be on the agenda for many small firms. It turns out that the respondents who work for the smallest businesses in our poll are the most inclined to cut back on digital advertising (the most popular option) rather than on email. When asked which kind of advertising they might eliminate in the year 2023, 29.5% said digital ads, while just 13% said email.
When asked directly about their intentions for email in the coming year, a whopping 88% of small firms report that they want to either grow or maintain their investment in email marketing. The success of the small firms that have adopted email as a primary means of communication demonstrates that this strategy is effective.
The group of small businesses has chosen the following three email strategies as the most important ones for the coming year:
Forming of Lists (41.5%)
Customization (36.5%)
Email marketing and content sharing (31%)
(From a possible 12, respondents chose no more than three strategies.)
Possibilities to promote one’s small business
Also of interest was the extent to which respondents believed their communication approach could influence the outcome of the recession. To that end, we asked poll takers to name the three most promising openings in the coming year.
Those with the fewest number of employees had results similar to the overall sample when asked about marketing prospects for small businesses. Opportunities for small firms are similar to those for large ones.
For the coming year, just over 41% of small firms believe that increasing brand awareness is an opportunity, while 39% believe that increasing client loyalty is the best course of action. The fifth-place finisher had an efficiency-boosting percentage of 28.5%: Streamlining procedures.
To capitalize on prospects in 2023, only 6.5% of businesses with fewer than 10 employees plan to invest in new communication technologies.
I’ll be honest: a downturn probably isn’t the best time for a small business to try out some cutting-edge management or software. The economy’s volatility makes it difficult to predict how these shifts will play out.
No of the state of the economy, opportunities to raise visibility and strengthen customer loyalty are invaluable. Businesses that can maintain their quality and customer base during a downturn stand a better chance of regaining their footing when the economy inevitably rebounds.
With email, you can protect your small business from the downturn.
For the time being, let’s discuss an alternative survey…

The impact of the slowing economy was explored through a survey of small company owners in the United States conducted by Nationwide. The survey found that 70% of people anticipate a recession in the next six months, but only 37% feel ready to deal with it.
Furthermore, the assessment of the entire country discovered:
Six out of ten people polled believe inflation is having a negative impact on their company’s bottom line.
There was a drop in income for four out of ten small enterprises over the past six months.
The majority of small-business owners (58%) have looked for ways to save money.
Let’s face it: economic downturns are depressing. But if they use email to their advantage, small firms may be able to prosper even in tough economic times.
Recall the beginning of the economic downturn that we all experienced in 2020 as a result of the COVID-19 pandemic. In order to better interact with their clientele, several companies have begun using email. For tiny, locally owned enterprises, email was crucial. They communicated everything from critical safety and operational updates to positive reinforcement and promotional offers using this medium.
These are five ways email might aid SMBs when the next economic downturn hits.
First, to increase exposure of the brand
Email marketing is essential to maintaining your brand top-of-mind during a recession, despite the fact that it often only reaches consumers and subscribers who are already familiar with who you are and what you do.
We can’t afford to be quiet right now. While it’s best not to take advantage of people’s anxiety about the state of the economy, it’s still important to provide communications that are both useful and timely.
No of how much less money your clients spend with you next year, you still don’t want them to defect to your rivals. The goal is to have your product or service be the one people automatically think of when they are ready to buy, regardless of whether or not the economic downturn is over.
Second, strengthening devoted patronage
When it comes to fostering and rewarding customer loyalty, email marketing is great for small businesses. Word-of-mouth advertising and referrals are two other channels that can benefit from their use.
Data reveals that in times of economic hardship, it is much simpler to convert existing consumers and subscribers than to go out and find new ones. Thus, propose cross-sells and upsells via email to maintain customer engagement.
Satisfied consumers are loyal customers.

Third, communication automation
Transactional emails are a lifeline for small businesses. Any and all transactional messages, from password reset links to order confirmation emails, fall under this category. Customer service is not limited to interpersonal interactions; transactional communication plays a vital role in fostering brand loyalty and raising brand consciousness.
Emails like these are useful since they are often automated, which simplifies processes. A new customer can learn the ropes and what to expect by receiving an automated welcome series or onboarding emails, for instance.

Formulating a plan of action

Our poll found that small business owners place the greatest importance on list building among all email marketing practices. It may be more difficult to convert new consumers when individuals cease spending, but there is no financial barrier to signing up for an email list.
Thus, encourage individuals to sign up for your email list by offering them something they can’t refuse. This could be in the form of discounts, insider knowledge, humorous pet anecdotes, or informative articles in your newsletter. Any Valid Method (just try to keep it somewhat relevant).

• Customizing communications

Consider including form fields to capture information about new subscribers that may be used to tailor their inbox experience. That might involve classifying them into subsets or using them for granular customization.

These days, customers have high expectations of the companies they work with, and they want their interactions with those businesses to be uniquely tailored to them. That’s presumably why so many of the people who filled out our study consider personalized email to be an important part of their success. Adding a human touch to emails helps them feel more welcoming, which increases client retention. But it also adds authenticity and relevance to your mailbox experience.