We are clearly in a period of huge uncertainty and the next few years could prove very challenging for us all.
We know from experience that the first response of many businesses in a recession is to cut marketing spend. This “batten down the hatches” approach is perhaps an understandable reaction when businesses are anticipating that sales and revenue will drop.
But is it wise?
As the 2008-9 recession proved, slashing marketing spend and activity is an approach that can destroy value in much less time than it took to build it. A company that leaves a gap where their marketing focus used to be instantly creates a space for competitors, allowing usurpers and disrupters to more easily move in. In a downturn, consumers are typically looking for stability and confidence wherever they can get it.
Cutting marketing in a recession also fails to recognise that a company’s main customer base still need to be nurtured and engaged. These audiences will have their own response to any economic uncertainty and the last thing you want is for them to choose to reduce their spending with you, or switch to a competitor.
In the midst of recession and uncertainty it’s all too easy to fall into the trap of focusing solely on sales-oriented activities such as price promotions. But there is plenty of evidence to show that a marketing strategy that strengthens the connection between your brand and its customer base is extremely helpful. It should help sustain your brand through the recession and eventually allow your business to stabilise and grow into the recovery.
But be warned. Pivoting your value propositions in order to demonstrate how receptive you are to customer needs - and therefore still relevant - must be done with care. As with first dates, too often these efforts come across as clumsy fumbling and reeking of desperation. If you want your brand to be seen as supportive and attractive, you have to be authentic.
Change for the better
Change is a characteristic of any downturn, for good and for bad.
You may find you acquire new customers, as well as lose some. You may also see changes relating to the audience segments you currently target. For example, customers who switch to supermarket own-brand product ranges even if they previously bought exclusively top-end brand products.
Not everyone switches their loyalties though; it’s also been shown that many people remain reluctant to swap brands even as things change around them. There may be something comforting about familiar, trusted brands and products. Or perhaps there’s a resolve and determination not to be beaten down by events. Or even a determined belief to hold on to some sense of normality.
Whatever the dynamics of your particular market, your marketing team will be well placed not only to spot change but to take advantage of new opportunities as they present themselves during what is going to be an uncertain period of shifting loyalties and transformation.
I took my diploma in digital business four years ago and we talked a lot then about agility as the ability not not change quickly but to learn quickly. To test and learn, without betting the company in the process. This is surely going to be one of the strategies more widely adopted by companies in future.
Flying through the storm
Here are a few suggestions to might help in navigating your way through any tempestuous times that may lie ahead:
1. Understand if and how your brand can support your customers. Be honest!
2. Segmenting audiences and creating relevant buyer personas that clarify their underlying concerns, their financial means, and their expected approach in a downturn, is an extremely helpful exercise to help tailor messages.
3. Flexibility is key and requires an agile mind-set such that strategies and tactics can be adjusted. By all means assume any recession will be long and hard, but keep a weather eye out to respond quickly to change when it comes.
With all this in mind perhaps the biggest change for a company when faced with a major downturn is cultural, adopting an entrepreneurial mindset to embrace transformation and potentially structural reform. That can make huge demands on many companies, not least in their attitude to risk and reward.
But there are always market niches where your messages could carry greater traction, weight and influence. Never stop looking for them.
*Adapted from earlier articles about marketing in an economic downturn*
Written by Gerry Vincent
Marketing Communications ¦ Brand Proposition & Strategy Development ¦ Digital Marketing ¦ Director Level Support