It’s a common discussion in marketing meetings the world over, when entering into a period of recession, those focused on outgoings tend to brashly, and with little consideration, slash marketing budgets as a way to recoup some money.
However, this is a false economy.
Of course, there are often ways to streamline spending or manage it more effectively to navigate a downturn, but it’s not marketer hyperbole when you hear that a recession is the wrong time to cut off your hard work and campaign plans. Let’s explore why.
Marketing is about brands paying attention to and meeting the changing needs of the consumer. This is happening all the time and should be no different in a downturn. Consumers are aware of the increased cost of living, with 56% of consumers saying their cost of living has increased in the last three months.
With so much bad news on the economy consumers lose confidence and sometimes spend differently or less. These shifts can be temporary or permanent, but successful brands will flex with this change, not see it as a time to cut off. Put simply - when things change for the better, where do you want that loyalty and of course, the renewed vigour to spend? Brand loyalty is best built on those that understand their offering, how it fits into the lives of their desired audiences (no matter what is happening in the world) and nurses them through tough times, in favour of disappearing altogether.
As a nation, we are spending less on certain items, but less doesn’t mean consumers are ditching those things altogether. More likely, it means when they do spend on such items and experiences it will be more considered, less frequent but with brands whose messaging and campaigns are consistent, appropriate and sensitive to the challenges being faced by the consumer.
While economic downturn is likely to hit all industries, it’s clear to see from this Global Web index data that the following are set to be hit hardest and need to pay even closer attention to how they market to keep customers coming back over the next few months:
Travel & Tourism
Marketing during a recession: why it’s as crucial as ever
If you can think of a reason to cut marketing budgets, we’ve probably heard it, and while we know a team of expert marketers saying you should keep marketing sounds like a scam, it’s actually based on very sound reasoning. Let’s look at some of the common misconceptions around slashing budgets during a downturn.
You’ll gain in the immediate short term, but lose in the long term
True, that balance sheet looks rapidly healthier if you chop out a monthly retainer or a planned three-month campaign. And yes, you will temporarily save the money you were spending on your marketing, but you’ll lose out on potential sales to competitors who are still investing in their marketing and continuously building their brand in your absence.
If spending gets pinched at the consumer end, those pounds and pennies become harder and harder to tease out. Reducing spend or being conscious of their outgoings doesn’t mean spending stops - if you’re a travel brand, or food and drink brand and you know your customers are spending carefully, then don’t you want their more considered, sporadic investments to be with you?
Fewer people will know about your reduced or inflated prices
Brands that step back from marketing tend to think that simply reducing prices - or perhaps even increasing them - will aid them in the interim period, but in reality, if your reduced prices aren’t being promoted, then they probably aren’t being seen.
If you instead opt to focus on increasing prices or limiting your offering to see you through a downturn, you’re very likely to need more support in conveying your value to your audiences and why they should choose you, than less.
We will talk more later about how price is not the only factor here and what you should be doing to maintain loyalty is working on adding value, not removing it. Consumers want to work with, buy from and support brands that they feel are attuned to their struggles and needs.
It’s harder to pick up where you left off when the economy recovers
When you stop marketing, you lose momentum - all that time you spent building your brand will go to waste. Whilst customers might have prompted awareness of your brand, they’ll forget it and forget about considering you if you don’t stay at the top of their mind - in their feeds, inboxes etc - maintain visibility, because your competitors will take your share if you don’t.
Your existing team may struggle to cover the entire marketing mix
Times of flux are not the time to move away from your consumers and audiences. They are astute and aware of those seeking to support them and offer value, so you need to be present to deliver this. A challenging economy also means your approach to marketing needs to change frequently. You must be agile and able to pivot to changing needs - this is when your agency or marketing team come into their own and you need their skills and expertise to manage this well.
How can I market effectively in a recession or downturn?
We’ve established that you need your agency and we know that budgets may feel tight, but we hope it’s been made clear that you pay double for cutting off marketing when your audiences need to see it most. So, what should you be focusing on during a recession or downturn?
1. Show added value
Sounds obvious, but if you can’t offer reductions in cost because - let’s face it - times may well be harder for you as well as your customers, then you can look to stay front and centre of their decision-making by offering extra value elsewhere.
You can show your audiences that you understand times are challenging and you’re seeking to accommodate and nurture their custom, in a variety of ways. This could range from payment options and plans such as Klarna, through to things like cost-free content that’s exclusive to them, perhaps with hints and tips to make your product or service go further - for example food brands may have recipe ideas, tips and meal planners to download. Show them you’re part of the solution, not the challenge.
You can also garner trust and loyalty with vouchers, free samples or loyalty schemes that incentivise them to return to you time and again.
2. Make room for joy
If there’s one thing lockdown showed us, it’s that even when things are tough, people still make room for joy.
Expect that consumers will perhaps have to be more frugal, but that doesn’t mean they want to abandon everything they love. So, as above, if there are ways you can make the product or service you offer front and centre for when they are ready to purchase, you’re going to be in a much stronger position than those who backed off as soon as the downturn started.
The more collective stress we feel, the more we seek out connection, community and fun - your brand and marketing strategy, if well executed can help add those pinpoints of happiness, or a treat when people need it most - keep reminding them of what you can offer!
3. Brace for the long path to purchase
We’ve spoken a lot this year as an agency about the death of the traditional ‘sales funnel’ and its replacement, the sometimes long road that is the ‘messy hexagon’. In essence, this is a model we think reflects the modern consumers’ path to purchase - and all versions thereof.
What is vital when bearing this in mind is that there is no one route, therefore you and what you are offering needs consistency to ensure you’re front and centre at all these stages. This can be achieved in a variety of ways, but whichever channels you choose, you must remember both those that are ready to purchase and those that aren’t, but will be soon (they need nurturing over that line). To utilise consistency to convert, you need to be showing you understand what’s happening and offering something to them that your competitors can’t or won’t be matching.
When your consumers feel like you’re in it together’ they feel more compelled to choose you to support and spend their hard-earned money with. This great example from Getir shows a temporary rollback on prices that not only taps into the very popular trend of nostalgia in marketing, but shows the brand is on side with customers who may be struggling with price increases.