Across the world, warning signs of a recession are looming. This prolonged period of economic decline brings a sense of fear and flashbacks for many. Recessions feel gloomy for consumers and businesses alike, but what many companies fail to see during a recession is the opportunity to survive and thrive by continuing marketing efforts.
Cutting marketing budgets during a recession may seem like a good idea. In reality, it is more crucial than ever to market during a downturn to compete for limited consumer spending and establish your brand for long-term success.
In the business playbook, short-term moves can help many companies. These tactics include adjusting service pricing, lowering operating expenses, and cutting certain production costs. But one thing is sure; advertising budgets must remain.
The Short Game
"When times are good, you should advertise. When times are bad, you must advertise." – Bruce Barton.
This is a common phrase used among marketing experts that has repeatedly proven true.
One study showed that companies that continued advertising as before or increased spending during a recession saw a 256% sales growth over those that either cut marketing or reduced it by the end of those five years.
Alternatively, going dark during a recession creates a perception of failure for the consumer and can be as, if not more, detrimental as the impact of a recession itself. When brands stop advertising for a year or more, sales often decline year-over-year. A study from the University of South Australia found that, on average, sales fall 16% after one year and 25% after two years. It is vital to reassure your consumers of your brand value more than ever when they are more careful with their spending due to limited finances. More than ever, during a recession, it is vital to establish your business as a reliable and relevant brand through the uncertainty in the consumer's journey. Continue marketing to reassure consumers that your brand will meet their needs and is worth investing their limited resources. This shift in the customer journey is essential to keep in mind, and it may require a different message and value proposition. Businesses that fill a void for customers during a recession have higher retention of new customers once we crawl out of the recession. It's less about cutting the marketing spend and more about changing how you spend it.
By playing the short game and staying consistent in marketing, you establish yourself for the future.
The Long Game
During a downturn, marketing will impact your survival and your brand and business's long-term sustainability and growth. As others reduce their marketing efforts, you can position yourself front and center with less noise from competitors, effectively growing your share of voice (SOV) and, therefore, SOM.
To meet your consumer's needs, it’s important to listen to them and find a solution to their evolving desires. The biggest mistake you can make is to continue your marketing strategy without acknowledging changes in your customers' needs and experience.
At the core of each consumer is the desire to have needs identified, acknowledged, and met. What is your consumer base talking about? How can you enter that conversation and provide a solution? Whatever the message, it must be sincere. Even if your findings are supported by research, it could be all in vain if your messaging is insincere or insensitive. In a crisis, people crave human connection and sincerity. Humanize your message and work to make your consumers feel understood. This, too, will help you in the long run.
Adapting to an economic downturn will help businesses connect with consumers beyond the sale. This loyalty and brand value will help your business successfully crawl out of the recession and thrive in the long run. Recessions bring a wave of emotions and fear to companies and consumers alike. Both parties must be open to change and adapt to the environment during its peaks and valleys because, often, valleys bring new opportunities.
At FifthColor, we have all the experts under one roof. Each and everyone is a problem solver. Are you wondering how to market your brand and business during an economic downturn? Or how can you make every dollar count and work for you? Contact our team of experts to get solutions! We offer end-to-end solutions to help your business survive and thrive in any economic climate.