Economy Exploding?! 7 Powerful Stats to Guide Your Marketing Now
The Age of AI officially arrived in December of last year.
At that moment, after ChatGPT launched, an entrepreneur I know posted on Facebook that he was shutting down his info-product business and moving out to the countryside to start a farm.
The agency business model was doomed as we know it, he said, since that’s who his products focused on helping.
Then the second, third, and fourth-largest bank failures ever happened recently. And on top of that, some global conflicts are escalating in some parts of the world, and everyone appears united in predicting “economic woes”.
Should you run for the hills and get going on that chicken farm because the end is near?...
Well, probably not (although farms are cool if you’re into prepping).
One thing is sure: We are living through a time of great change.
The real question is, what is actually likely to happen, and how do you apply this data to best position your business for the opportunity that always comes with such change?
To help you answer these questions, I’ve gathered the following data and compiled my best strategies for responding.
Here’s a quick overview if you want to jump to the sections you find most relevant to you:
- State of Economy Stat #1: US Inflation Rate is at 4.98%, down from 8.54% last year.
- State of Economy Stat #2: 48% of Marketers Making No Change or Are Increasing Their Budget (and More)
- State of Economy Stat #3: 78% of Marketers Say We’re In a Recession But…
- State of Economy Stat #4: ~77% of all Marketers are Maintaining or Increasing Their Overall Marketing Budget (Visual Breakdown)
- State of Economy Stat #5: In February, CEOs Thought There Was a 99% Chance of a Recession
- State of Economy Stat #6: 86% of CEOs Are Preparing For a Recession (But with a “Softer Landing”)
- State of Economy Stat #7: The BCC Predicts Inflation to Be Around 5% By Q4
- How To Prepare and Adapt Your Business so You Can “Grow With The Flow”
- 4 Powerful Tips To Grow Your Business In This (Probably, Maybe?) Recession
As Elon Musk said, “The most ironic outcome is the most likely.” Maybe the most ironic economic outcome is that… Because we all expected it, it didn’t happen
And then you and I and other savvy companies and entrepreneurs used this “recession” to find new and smarter ways to invest and grow.
Let’s dive in, and find out.’
Whatever is going on with the economy, you’d probably love to find a way to both cut costs and grow faster. With Growbo.com you can delegate your all marketing projects without the typical headaches of hiring. Learn More and Start Your $7 Trial Today.
State of Economy Stat #1: US Inflation Rate is at 4.98%, Down From 8.54% Last Year
So… Inflation is Going Down
Our annoying friend, inflation, has been playing with all our wallets lately, but there is cause for hope.
The U.S. inflation rate was only about 5% for the 12 months ending March 31, 2023. While that is still higher than the 3% the Federal Reserve aims for, it is decreasing significantly.
Judging by Federal Reserve Chair, J-POW’s (a.k.a. Jerome Powell) expression below, it appears he’s still wondering if the worst is over.
What Does This Mean?
Price drops in energy, cars, and trucks might indicate that the Federal Reserve’s interest rate hikes are working their magic.
That means we could be at or near the bottom of this thing (which would make it the perfect time to start re-investing in your business and your marketing).
Speaking of investing in marketing, let’s see what the data says marketers as a whole are doing with their budgets.
State of Economy Stat #2: 48% of Marketers Increasing or Keeping Their Budgets The Same, But There’s More…
Notably, Marketers Say They Will Be Investing More Going Forward…
According to the annual CMO Survey, 48% of marketers survey say they are maintaining their marketing budgets or (16% of the 48%) are increasing their budgets.
Meanwhile, inflationary pressures have caused 52% of marketers to decrease marketing spending — which is actually a 20% increase from the previous year.
48% is pretty good, in my judgment.
The best news here is that they expect to ramp back up their spending and budgets in quarters three and four.
Keep Your Costs Down and Pounce On Opportunities
With more than half of marketers reducing spending, the cost of advertising could drop during a recession, presenting an opportunity to acquire customers for less.
This assumes your offer remains compelling, and consumers aren’t increasingly price-sensitive. If they are, it’s time to get creative with your offers.
“Consumers are expecting to spend more whether we like it or not, but it’s really how we can help position these businesses for success around that and keeping some of their other costs down.”
– Jennifer Glanville, director of partnerships & collaborations at Boston Beer Company
To cater to cautious spenders, consider removing friction (see: Law of Friction from our 11 Laws of Sales Funnel Physics framework), offering free trials, or introducing low-ticket offers.
For example, at Growbo, the team and I twice tested removing our $7 for 7 Days trial offer. (We were the first services company I’ve ever seen to make such a generous offer for the sheer quantity of value we give – accept no imitators )
And then, we re-added it to our funnel as part of this sequence test.
We found our growth rate is roughly 2x higher compared to what it was without it, and clients seem to love it, with more and more clients signing up daily.
As you can see from the chart above, a significant portion of buyers want both low prices and high quality. So you want to do what you can to give them what they want.
In short, your business needs to “grow with the flow” and adapt to be ready for change. We’ll talk more about this coming up.
State of Economy Stat #3: 78% of Marketers Say We’re In a Recession But…
But Are We?
Technically, two consecutive quarters of negative GDP means we’re in a recession.
Well, we had a plot twist in the summer of 2022 when the U.S. dipped into a recession, only to bounce back with a 2.6% GDP growth in Q3. Nice save, good for business
So Are We Running For the Hills, Or Not?
Marketers surveyed by Hubspot overwhelmingly say we’re in a recession — 78%.
The truth is, a recession’s start and end are usually only known in hindsight. Further, a recession does not mean your sector and your niche in the economic pie chart aren’t growing.
The Federal Reverse, our (not so) reliable economic sleuth, doesn’t give firm answers most of the time, but J-POW did say he expected one this year. But he also gives quotes like this:
The recession question mark looms over the economy, but not necessarily you and your business.
A lot of what is key to thriving and profiting during a recession comes down to your own mindset and the strategies you employ. We’ll discuss this more in the tips section.
Interestingly though, here’s another stat…
State of Economy Stat #4: ~77% of All Marketers are Maintaining or Increasing Their Overall Marketing Budget
Say What? Increasing Their Budget?
That’s right, I was a little surprised, too, but this survey from Neil Patel, whom I’ve interviewed here in the past and conversed with over the years, is very thorough.
Over 8,000 marketers responded.
The key takeaway is that:
- The vast majority of marketers are increasing or maintaining spending across almost every channel. The only exceptions were Facebook and Instagram (where ROI is harder now with the Apple cookie tracking policy) and Traditional Ad Buys (e.g. billboard or magazine ads where it’s more difficult to track).
Here’s another chart (below). It’s funny that, according to the survey, there are marketers/brands leaving Twitter because they don’t like how Elon is running it…
But then there are marketers who are increasing their budget and doing so because they believe the others are leaving, causing a drop in ad rates, which is an opportunity for them! lol
Overall, I think this data is both fascinating and cause for realistic optimism.
This makes it even more fascinating how business leaders and marketers are both expecting a recession AND investing the same and (in many cases) more in marketing.
Here’s the data…
State of Economy Stat #5: In February 2023, CEOs Thought There Was a 99% Chance of a Recession Coming
Well… Where Is It?
In 2023, CEOs worldwide voted a recession/downturn as their No. 1 external concern for the upcoming year. This fear topped the charts in every region except China, where it ranked No. 2. It was quite a jump from 2022 when the recession was only No. 6 for both U.S. and global CEOs.
Additionally, a report from the Conference Board puts the probability of a recession occurring at 99%.
And when nearly everyone agrees on something, it is absolutely never wrong, right?
I’m kidding, the data does seem to indicate a slowdown may happen (or already happened). But the data also continues to give reason for a strong opportunistic outlook.
“CEO confidence rose markedly between Q4 2022 and Q1 2023, but continued to signal a degree of pessimism among CEOs.”
– Dana M. Peterson, Chief Economist of The Conference Board
Fear Is a Huge Factor
What people expect (or fear) isn’t always what happens, especially in economic downturns.
When YouTube’s algorithm isn’t telling me how AI is going to take over the world, it likes to recommend videos about how there’s a new study or expert who thinks the economy is 3 seconds away from completely collapsing.
I mean, it would suck if it did but is that realistic?
For instance, after the market bottomed out during the pandemic, many expected it to crash again (it didn’t). Instead, it climbed until recently, peaked, and then underwent a market correction.
Just because people anticipate/fear a recession doesn’t guarantee it’ll happen. If anything, since it’s been a slow-moving event, the impact might be shallower than expected (see the next stat), which means an opportunity to start investing.
In other words, it might already be “priced in” as stock traders like to say.
Here’s another stat, which in a strange way, goes hand-in-hand with the stat from #4. I’ll explain what I mean below…
State of Economy Stat #6: 86% of CEOs Are Preparing for a “Brief and Shallow” Recession
But With a Softer Landing…
86% are prepping for a “brief and shallow” recession within the next 12-18 months (down from 98% in Q4 2022) according to another survey from the Conference Board.
Maybe It’s Not As Bad As We Think
Other survey data show that CEO sentiment regarding the certainty of a recession is dropping. They still foresee a recession in the U.S., but it’s like the financial version of a summer shower: brief, shallow, and without too much global spillover. So it seems the world won’t end just yet (hooray ).
While the word “recession” may trigger cause for concern, remember that CEOs expect a relatively mild one. So instead of stocking up on canned goods and building a bunker, there’s good reason to believe we’ll have a soft landing.
So again, most business leaders expect a recession (brief and shallow they say), AND at the same time the majority are maintaining or increasing their ad spending.
What can you conclude from that odd pairing of facts?
I read it as twofold.
- Many businesses see now as an opportunity for growth. They know that when others pullback is a good time to “attack” (e.g. maybe ad rates will drop and then they can acquire customers for less)
- They think a recession will happen – but they believe strongly in being optimistic, opportunistic, and to invest now for growth.
Let’s look at one final stat on an individual country level.
State of Economy Stat #7: The BCC Predicts Inflation to Be Around 5% By Q4
5% is Going in the Right Direction
The BCC’s (Britain’s) latest Quarterly Economic Forecast predicts the inflation rate will drop to a more tolerable 5% by Q4 2023.
Still, small firms face a mountain of cost pressures that threaten to crush growth. Costs take some time to come down after inflation eases.
Costs Are a Major Factor
Although this data hails from Britain, it’s still a valuable insight into the challenges businesses face worldwide. With mounting cost pressures, turning a profit can feel like scaling Everest in flip-flops.
The way through this cost overrun mess is to adapt. Businesses that constantly adapt, find ways to grow even amid economic turmoil.
After all, necessity is the mother of invention, so get creative with lowering costs or increasing value (as we’ll talk about later).
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How To Prepare and Adapt Your Business so You Can “Grow With The Flow™”
Next, let’s look at ways to be more prepared when opportunity knocks.
Do What You Gotta Do
A recent survey from Agency Forward found that nearly 58% of business owners have explored cutting expenses in the last 6 months, with 38% dipping into personal savings and 22% canceling or postponing significant investments.
The job market is also affected, with:
- 38% pausing hiring
- 23% furloughing workers or reducing hours
- And only 14% are planning to hire more employees
Additionally, 42% and 41% of owners plan to withhold raises and bonuses, respectively.
How Can You Grow With the Flow?
You want to be one of the 14% who are growing and profitable.
As fear and concern sweep the business landscape, weak companies may crumble due to unsustainable borrowing while others cut back.
So how can you stay part of the 14% who are growing?
Money, like energy, isn’t created or destroyed; it merely changes form. In times of change, opportunities emerge when they weren’t there before. You need to find them. Finding them is called “adapting.”
The secret to success isn’t asking if you’ll make it but figuring out how.
It’s never a question of "if", only a question of "how".
Invest in Digital Marketing, But Do You Double Down On Content?
There’s a reason why in one of the survey’s above marketers are investing heavily (and more and more) into content, SEO, and social. It’s because it works.
If you’re a small business owner though, I recommend you use these channels but focus on one or two to start.
Small business owners usually have amazing domain expertise, they know their niche market and they know how to connect with them. But there’s a problem they run into.
Either they get too involved and can feel burned out from trying to “be everywhere” (see data above, top 2 reasons for burnout) or divorce themselves from the process and leave it completely to others who do not know the market as well.
Delegating is a good thing and necessary for growth (we’ve built Growbo around that idea to help brands and entrepreneurs scale).
But you'll get the best results when you collaborate with your content team by editing, coaching, and training, especially in the beginning.
We see this with our clients over months and years; the ones who succeed big are also committed to delegating without completely exiting the marketing process.
That’s because, while people learn over time, no one understands your business, your product or service, and your customers as deeply as you will since you’re on the frontlines every day.
So involvement, especially in the early stages, is key for the best and fastest results.
Conclusion: invest in digital marketing, especially with content, but delegate smartly.
Stay Focused, Adapt, and Cater to Your Customers
Learn to Adapt
Resilience means adapting your business model and being flexible with your products or services when the market appears to be “yelling” at you to do so.
Is the market yelling at you to adapt and change? Maybe it is, and you aren’t listening.
How Can You Grow With the Flow?
Nobody knows how long this downturn (assuming we’re in one) will last.
Remember that you are only limited by your ability to solve the problem creatively.
And even if this is a challenge, you can outsource this too to your smart friend.
For example, cutting prices is easy, but ask yourself the fundamental question if people aren’t buying like they used to:
What and how can you change your offer or your marketing so that the same and more customers or clients will want to buy again?
- You can remove friction with a trial
- You can increase the value of product or service by adding new benefits / features
- You can conduct an AB test to increase your conversion rates
- You can come up with a high-value, high-converting lead magnet
The answer doesn’t have to be super fancy or even complicated.
The right answers often aren’t.
I look back at how our website looked in 2019, 2020, and 2021 and I’m like:
“Really? We tripled in 2020, and tripled again in 2021 breaking the 7-figure mark and our design looked that simple?”
But it did, and it worked.
Find the problem in your sales funnel, and then fix it.
Powerful Tips To Grow Your Business in This (Probably, Maybe?) Recession
Even with the economy's current state, you can use these tips to increase your business' revenue and ROI.
- Mind Over Matter: Success is a habit and a mindset. Channel your inner opportunist and ask, “How can I make it work?”
- Margin Mania: Know your margins. It’s that simple. Break out a spreadsheet if it’s been a while (or never) and write down all your costs and evaluate it on a per product or per client basis (Cost of Goods Sold, COGS). Then, compare it to your revenue over time. Then turn it into a financial project 12 months out. Play with the cost and growth levers to see what most influences growth.
- Trim the Fat: One of our clients, whose business doing low 8-figures, loves to tell us how they fired their overpriced agency when they found Growbo. Elon Musk fired over 80% of Twitter staff and the company is still humming along, on track to being bigger revenue-wise than it was before. Find and remove the unnecessary and it will increase your profit margins. Growbo’s delegation service will save you $10,000's of dollars compared to traditional hiring or outsourcing options. Right now, you can get 7 days for just $7 without the headache of hiring, payroll, or interviews. We’ll help you break your creative and marketing bottlenecks and keep you growing.
- ABP — Always Be Profitable: Profitability breeds sustainability. Remember, the most successful companies don’t run at a loss. Just ask Jim Collins, Stanford professor and author of “Great by Choice” and “Good to Great” which does in depth profiles on high performing companies.
Conclusion
Download the "Economy Exploding?! 7 Powerful Stats to Guide Your Marketing Now" so you won’t forget to take action on it later. Click here to download it now.
I don’t know about you, but stats like these give me reason for “realistic optimism”. This economic downturn might be already behind us (time will tell), and it’s a great time to invest.
To recap:
- Most marketers and CEOs expect a recession but say it will be brief and shallow.
- On the flip side, most companies, rather than slashing their marketing budget to prioritize profit margins and stacking cash in case of an “economic winter” – they are actually doing the opposite…
- The vast majority of companies and keeping their budgets the same and many are investing more, except into certain channels, but even that may present an opportunity for you, fellow Growboer
- In the end you want to stay adaptable. Cutting prices is an option, but you should think critically about your marketing channels, crafting more effective lead magnets, strengthening your offer, and locating any funnel bottlenecks.
If you found this article valuable, don’t hesitate to download a copy to keep these tips at your fingertips and share it with your fellow team members or other marketers and entrepreneurs who might benefit from a “potential glimpse” into our economic future.
Plus, I’d love to hear your thoughts.
What is your outlook on the economy, and what are you doing to keep your business profitable and growing?
Let me know in the comments below.
Keep Growin’, and stay focused.
