By Scott Miraglia, President, Elevation Marketing
Every four years in the United States, something strange happens. It’s like an electrical impulse short-circuits everything you thought you knew about B2B sales and marketing, and suddenly, you’re in the Twilight Zone.
Leads slow down, new contracts take forever to close, current clients freeze their spending and it feels like a red moon, solar eclipse and Bigfoot all rolled into one. Welcome to the six months before a presidential election –– the most unpredictable time in the B2B space.
In my younger days, I found it tough to wrap my head around all the chatter about running a business during election years. Now, I see how it all shakes out in the world of B2B sales and marketing. Things get strange!
And here we go again. It’s that time of year when we get a mixed bag of predictable and unpredictable behaviors that keep us on our toes. We’re talking about conversion rates dipping, content consumption taking a detour, and the usual suspects: delayed closings, project implementation holdups and staffing snafus. Let’s not forget the uptick in price sensitivity and those sneaky little shifts in customer behaviors that are both obvious and subtle. It’s the election year equivalent of a rollercoaster ride.
Sure, foot traffic, digital clicks and sales on the B2C side might hold steady. But the pace at which B2B customers make decisions slows in Q3 and Q4.
Why Does This Happen?
Who wins the presidency can dictate massive policy changes that impact whole industries. As an example, if Candidate A is voted in, we might see lower tax rates, less regulation, more oil and gas drilling, and higher tariffs. If Candidate B is elected, it might mean higher taxes but a boom in green energy and healthcare spending.
These political shifts reshuffle where businesses invest, affecting the revenue and profit prospects of tens of thousands of companies, worldwide. It’s not just one industry that’s impacted; it’s several big players and the ecosystems that support them.
What’s the Data Saying?
Here’s the kicker. According to a report from the Journal of Finance, firms reduce investment expenditures by an average of 4.8% during election years compared to non-election years. That report is almost 15 years old, and given today’s heightened political uncertainty, the reduction might be even higher.
It’s not just academic papers stating this. According to a New York Times article, Stephen Suttmeier, a technical analyst at Bank of America Merrill Lynch Global Research, noted that since 1928, the S&P 500 index has fallen an average of 2.8% during election years when the incumbent isn’t running for re-election.
What Are We Seeing?
We’ve observed intriguing patterns in our data. Web traffic and search volumes remain steady, but form fills and product inquiries are down. This behavior suggests that businesses are shopping, gathering data and vetting vendors but are waiting to move forward until the political winds clear.
We’re also noticing marketing job data fluctuating. After the last election, finding marketing talent was nearly impossible. This was partly due to the Great Resignation, but it was also influenced by government spending priorities, which created a more competitive landscape for talent as businesses adjusted to new funding and resource allocations.
So, here we are in late 2024 and B2B businesses are hitting the brakes on their marketing teams. This has left many understaffed and forced them to do more with fewer resources, all while budgets have tightened significantly. While some of this was driven by concerns over the economy, much of it stemmed from the uncertainty that a presidential election brings.
Today, the competition among marketers for job opportunities has become fierce. When our company posts openings we’re drowning in applicants—10 to 20 times more than just three years ago!
Why Should You Care?
Companies are savvy. Social policy initiatives such as border security, minimum wage, taxes and economic protectionism all affect the flow of trillions of dollars, especially in the B2B space. Organizations aim to ride with the wind at their back, seeking the right mix of products and services––whether through innovation or acquisition––to effectively capture the influx of government spending. So, they hold off on strategic decisions until after the election when they can capitalize on the resulting momentum.
What Should You Do?
Don’t panic. Do what we do. As a marketing agency that serves B2B clients, we have 25 years of historical data suggesting that customers are doing their research now. Analytics show that the data is skewed from June through November during an election year, so avoid making big strategic changes until you have three months of post-election data. The trends will likely revert to what you saw in Q1 and Q2 of 2024.
For this reason, we don’t dramatically change our tactics or our clients’ strategies––maybe a bit more content now and a little less paid search.
Businesses are making plans based on potential political outcomes and will be ready to engage full throttle starting in December and January. If you’re in the B2B space, ensure you’re on their radar.
Final Thoughts
The election cycle will eventually pass, and business life will return to its usual, predictable rhythm. Stay tuned for more insights, and don’t forget to keep your sense of humor intact––it’s the best way to weather the unpredictable storm of an election year.
In the meantime, don’t hesitate to reach out if you need guidance with your sales and marketing strategy during these uncertain times.