Marketing in a Downturn
.. and when we say “unusual” we mean the dreaded R word of Recession.
During 2020 we have witnessed the most unusual of times. The global pandemic response is affecting, and will continue to affect, businesses of all sizes in almost all industries throughout the world.
Since the beginning of the lockdown, there has been much talk around an economic recession. The large amount of money injected into businesses in the UK is – at present – holding this off somewhat. However, another business slowdown is inevitable.
Supply chains are out of action, high streets remain closed, travel and tourist businesses are fearful for their future. Often when a recession happens, business managers and owners, protecting their declining revenues, begin to cut back in so called “non-essential” areas. Very often this includes their marketing spend.
As a business owner you only have direct control over spending, not revenue. So the immediate response from many is to slash costs and focus on what will generate income tomorrow – not what might be coming in in six to twelve months. When the economic slowdown really takes hold, short-termism in business spending is likely to become a real issue. The fight or flight instinct will kick in and thoughts turn to survival, not for the next year, but realistically until next week or at most next month.
We would suggest caution when cutting your marketing budget. Strategic spending – or investing in marketing when coffers are low – is still advisable. Basically…
If everyone stops marketing, no one wins. If all your competitors stop marketing but you continue, you win.
Two of the main brand marketing measurables, brand engagement and brand image, significantly deteriorate if brands shut down their marketing for a period of six or more months. Any brands going ‘quiet’ are assumed to be on the way down commercially. This is then quickly replicated in referrals and engagement, which accelerates the perception of failure to your prospective clients.
Brands in industries that are price-driven and rely less on brand recognition – such as motor fuel, groceries and day to day fashion – are much more susceptible to market share reduction when cutting their brands marketing budgets. Conversely in the ‘luxury’ sector this is much less likely. This is due to the increased brand recognition in automobile and high-end accessories for example.
Concentrate your marketing on brand and core products; focusing on your central business message will prove the most efficient investment in pound for pound spend.
Spreading your budget thinly across many products is less efficient than a core brand focus, driving customers to your business via brand awareness. However, streamlining the product portfolio and associated marketing spend does not mean shutting down on innovation. Improvements to core products will grab attention and motivate purchasers.
Worried consumers view familiar, trusted brands and their products as safe and reassuring choices during difficult social and economic times. Messages that reinforce an emotional connection with the brand, and products, demonstrates empathy.
These types of reassuring marketing mantra are, for example, “we will all get through this together”. Reducing your marketing spend and losing that known and trusted sense of community will hit the bottom line of businesses in the long term.
Consumers are using their social media accounts more than ever during restrictions – especially if they are uncertain about what is going on around them. Ensuring your presence is regular and engaging is key to keeping ahead of the curve with brand recognition. During the current lockdown social media is and continues to be one of the most significant forms of communication. The following associated economic downturn is likely to see this trend continue.
Internet usage has increased dramatically since February 2020. While part of this is undeniably people flocking to streaming platforms for entertainment, much is for communication purposes.
Consumers may not be allowed to head to their traditional high street favourites or go to a coffee shop, but they will still be interested in you and what your brand has to say, especially if you are reiterating the reassuring trusted voice they are familiar with. Consumers will take notice of useful, engaging, sharable content, and are likely to remember your brand, even if they have never used your services before.
We recommend using a data driven approach to online and social media marketing. Creating engaging content with measurable success criteria. Contact us to find out how we can help you make smarter use of your marketing budget.