First – Should Hospitality Businesses Cut Marketing in a Recession? Costs are rising, yes. Guests are spending less, also true. At the same time, when they do spend, they expect more value than ever. Crazy.
So what should hospitality businesses do? Save on marketing? Bad idea.
This is the moment to be louder with our marketing. Yes, easy to say. However, it is true that the time is now for laying the groundwork for future revenue. If we pull back with marketing, or even stand still, will things really improve?
Hospitality budgets are always tight. They have been for as long as we can remember. And right now, they’re tighter than ever. But cutting corners rarely works.
What to do then?
Two key moves to focus on, in my opinion:
- Tighten our finances – ensure every dollar spent works as efficiently as possible.
- Invest in short-term revenue-driving marketing – ensure every minute and dollar is spent only on efforts that bring immediate returns.
These must go hand in hand.
Think of our business and marketing as a pyramid: we build it from the bottom up, with solid foundations first, and then add layers on top. When budgets are tight, this is especially true.
The 3 steps to solid foundations that every hospitality business should focus on:
1. Drive foot traffic with efficient marketing.
Stop with the “posting on social media” nonsense, unless you have time for it. Instead, focus your time and energy on creating strong offers and deals for your customers, and find effective ways to communicate them.
e.g. creating and promoting great offers, targeted campaigns to our email list, installing outdoor signage/posters, and running local paid ad campaigns 24/7 (with those offers also).
2. Protect the top line to increase the bottom line through smart financial strategies.
Protect gross margins by either decreasing costs (minimising waste, cutting underperforming products, and unnecessary overheads) or increasing pricing. As a result, the net margin will improve, and the business will achieve a profit increase.
e.g. menu engineering, stock control, and careful staff hours management.
3. Increase customer lifetime value
Find ways to resell to your customers. It essentially involves valuing every guest who walks through the door, finding creative ways to keep them engaged, encouraging them to return, and adding them to your email list, among other things. This is where efforts should be directed, not posting on TikTok.
e.g. designing loyalty programs and nurturing relationships across the customer journey.
In summary:
- People need to know about us, and we need to get them to visit.
- Keep more of what they spend through smart financial management.
- Encourage repeat visits to increase long-term value at our hospitality business.
Marketing strategies are everywhere. But what we really need are priorities
actions that can help your hospitality business save or generate the most revenue in the quickest way possible.
That means focusing on what matters.
Not every business will survive this downturn. However, with clear priorities and consistent marketing, you will be well-positioned to thrive when recovery arrives.
I am optimistic.
Follow this blog as I share hands-on marketing tips with readers that I find helpful.
Thank you for reading my post.
I am Shopi.
I provide no B.S. marketing & design for Hospitality Businesses.
