With the IMF and World Bank warning of a rising risk of global recession – and with a recession in the UK and rising inflation in Australia – you might be considering how to make your company’s budget stretch further over the next few quarters. In particular, you might be looking at your marketing strategy – which areas to focus on, what messaging to use, and where to put your budget to maximise your results.
Recessions are never easy, but if you take the right steps, recovery will be much easier – and could even be an opportunity to boost your business. We’ve scoured the leading business and marketing titles to uncover the best practices to make sure your marketing is robust and recession-proof.
Resist the urge to reduce
When a recession approaches, many businesses may be tempted to cut their marketing budgets, especially if they haven’t experienced a recession before.
However, reducing your marketing spend can be detrimental to the long-term prospects of your business, even if it reduces costs in the short term. A study by B2B Institute Research Fellow Peter Field shows that “the subsequent loss of market share that follows” is “extremely difficult and expensive to regain during the recovery”, while research from the Institute of Practitioners in Advertising (IPA) stresses the loss of market share and sales, and a slower long-term recovery of profits.
Fortunately, evidence from previous recessions shows that continued investment in advertising leads to increased growth. Insights from the Institute of Chartered Accountants in England and Wales showed that, in the 2008 recession, advertising spend dropped by 13%. However, the businesses that maintained their marketing spend increased brand visibility by 350%. The same trend can be seen in the recessions of 1981-82, 1974-75 and beyond. (For more examples, see this factsheet compiled by the Advertising Specialty Institute.)
In addition, advertising costs are likely to reduce during a recession, because some companies will cut their budgets. This gives you a competitive advantage, and an opportunity to increase your market share by buying more advertising at a lower cost.
There could even be benefits to increasing your marketing spend while other brands are laying low. If you do so, you can increase your Share of Voice (SOV) – in other words, how much your brand is advertising compared to your competitors – and subsequently increase your market share. According to the IPA, in a study of over 1000 businesses, those who increased their marketing spend during a recession “reported higher market share growth in the first two years of recovery than those cutting or maintaining budgets.”
Remember your brand promise
During a recession, you’ve got to play the long game. An important way to do this is by focusing on brand marketing over short-term sales-focused marketing. Even outside of recessions, this balance is vital: Peter Field suggests a 60:40 split in favour of brand. Ultimately, you need to move potential clients through the “marketing funnel” (see our last blog for more info) – you need to get their attention, make them aware of your brand, and build trust in your brand’s mission and values before they’ll buy from you.
This is especially true during a recession. Some of your clients may not be ready or able to purchase straight away. In the words of Harvard Business Review (HBR), “consumers will be poorer or feel poorer. They will be more frugal and cautious in their expenditures.” However, they still have their dreams and aspirations, and you still have the opportunity to connect with them – and if you keep building that connection, they’re more likely to choose you when they can afford to spend again.
Focus on your brand promise – how your mission and values lead you to deliver an exceptional service. As well as helping you to build an emotional connection with potential clients, your brand promise is the assurance of your brand’s quality and consistency. This is vital, especially as clients may be concerned about other companies cutting corners to keep costs down. You may also have clients who can continue to afford your products or services in the midst of a recession – they will be especially concerned with quality, given the shifting economic landscape around them.
Relate to your clients’ needs
According to HBR, consumer behaviour changes significantly during recessions as consumers’ priorities and values change: consumers are more willing to put off purchases, negotiate prices, and buy from trusted brands; and they’re less willing to engage in conspicuous consumption. This means you will need to adapt your messaging to meet their new needs.
Clients are more likely to care about reliability, stability and safety, and that your core values align with theirs. Given the uncertainty in times of recession, the human element of your brand is more important than ever in your marketing. As the IPA put it – the most important thing, beyond how much you spend, is to “invest in empathetic, humane creativity.”
If you want to build your long-term brand engagement and boost your sales with stories supercharged with emotion and filled with a deep humanity, video marketing is vital. We can make it happen. Book a slot below and let’s talk about how to bring your vision to life.