Winning in a recession – a guide for marketing and brand managers
Emerging from a global pandemic. Combatting rising energy prices and skyrocketing inflation. Growing political uncertainty. It’s a challenging time for brands. No matter how optimistic you are, it’s clear – an economic downturn is on its way, if not already here.
We all know that marketing – and branding – is tough at the best of times. But it’s far easier when those times are good.
Emerging from the midst of the 2008 recession, a 2009 article in HBR cut to the chase: “In frothy periods of national prosperity, marketers may forget that rising sales aren’t caused by clever advertising and appealing products alone. Purchases depend on consumers’ having disposable income, feeling confident about their future, trusting in business and the economy, and embracing lifestyles and values that encourage consumption.”
And when they don’t? Then it’s really time to turn the dial up.
We all know about the heaps of research that shows the importance of marketing in a downturn. What can – at times – feel like a nice to have, is absolutely critical when the going gets tough. We need to stop thinking of marketing as a tool to sell more, and start thinking of it as the power house of the business.
And that’s all well and good.
But saying ‘you must market in a downturn’ is absolutely not the same as saying ‘you must do exactly what you’ve always done in a downturn’.
So we know we need to keep focussed on branding and marketing. And we also know that the brands that will win, are the ones that start first and get ahead of the curve. But what, and how, does good marketing look like in economic difficulty and uncertainty?
Here are three top tips to marketers preparing for an economic downturn.
1. (As always) Start with your customers
Traditional customer segments no longer hold. Demographics in particular become less important outside of ‘normal’ times. That’s because when times are good, people behave much more reliably. But when times are bad, people react and behave in much more erratic ways.
TOP TIP 1: Demographics are out, psychographics are in.
HBR summarise this nicely with four recession segments:
2. Take a magnifier to your brand
Regardless of which group consumers belong to, they prioritise consumption by sorting products and services into four categories:
- Essentials are necessary for survival or perceived as central to well-being.
- Treats are indulgences whose immediate purchase is considered justifiable.
- Postponables are needed or desired items whose purchase can be reasonably put off.
- Expendables are perceived as unnecessary or unjustifiable.
And where your brand sits will dictate what you need to do.
A recession can be a positive boost to value retailers. They can double down on price qualities. But for premium retailers, it’s a harder sell. So they need to double down on the value their product brings over and above financials, dialling up the tangible benefits it brings.
TOP TIP 2: In tougher times, it’s critical to take a magnifying glass to your brand, your product and the value you bring to people’s lives. Scrutinise the role you play in customers’ lives, the category your product fits into and your proposition – and make sure it’s still relevant in a downturn.
Whatever you do – never forget to remind your customers that your brand matters – over and above on a purely price tag perspective. In 2008 De Beers reduced its marketing budget faced with the looming recession. But when research revealed that diamonds represent enduring value to a majority of consumers, the company doubled its Christmas advertising spending over the previous year’s. Brand awareness ads in several media proclaimed, “Here’s to less,” and enjoined us to buy “fewer, better things” because “a diamond is forever”. Prices and desire remained stable in the face of what could have been disaster.
So ask yourself – what is it your brand offers your customers? Will this role change in a downturn? Is your product a premium product, value-driven or other? And most importantly – what benefit does it deliver that justifies the expenditure?
3. Reprioritise, refocus and realign
Armed with all the information – it’s time to think strategically and plan exactly what to do about it. Perform a triage on your brands/products or services in light of the above. Think about the role they play, your customers and how you can retain relevance with them. Then tailor your tactics at both a micro level and a macro level.
Pull everything you’ve gathered in steps 1 and 2 together, and ask yourself:
At a macro level – is your brand strategy fit for purpose?
- Does your proposition still resonate in a recessionary market – if not, what needs to change?
- Is your purpose a prominent brand asset? If not – could it be?
- Do your vision and values still feel relevant to the external context?
- Have you considered your employee experience and culture in light of what’s happening externally?
And at a micro level – are your tactics right to succeed in this new market?
- Are your prices and promotions comparable?
- Are your products and packaging relevant?
- Are you making the most of Category Entry Points – the more high quality CEPs you are linked to, the better
- Are your emails and campaigns hitting people with the right message, at the right time?
- Are you utilising your data and available assets in the right way at the right time?
TOP TIP 3: If the answer to any of the above is ‘no’ – think about how to tactically, efficiently and quickly pivot. Consider updating the language used in Point of Sale, tweaking email copy to show relevancy and adjusting the use of promotions in the short term – and in the long term, think about each of those brand elements and how they come to life – and whether any need to be reframed entirely.
And that’s it. A recession is coming, and the role of marketers is going to get even harder. Use the time available now to get ahead – reassess your audience, your brand and plan strategically today to future-proof your brand for tomorrow.
About the author:Victoria is the Strategy Director at CreativeRace, having previously been a Strategy Director at London-based Clear M&C Saatchi where she led strategic projects for large, global clients including Disney, Prudential, GSK. Prior to that she worked at a variety of brand strategy agencies including BrandCap and Kantar, as well as in management consulting at Deloitte.