When a recession hits, marketing is typically one of the first places business owners are tempted to cut. It is judged, perhaps too hastily, by companies as an expense rather than an opportunity. This is a mistake. It’s well documented that slashing the marketing budget in a downturn will only help defend profits in the very short term. Ultimately the brand will emerge from the downturn weaker and much less profitable.
Building and maintaining a brand that consumers recognize and trust is one of the best ways to reduce risk when the economy takes a turn for the worst. That’s why, in each recession cycle, the companies with a strong brand presence have come out on top.
And, consider this: Cutting the budget for marketing during a recession is a gut reaction many inexperienced business owners (and even experienced ones as well) will make. If your competitors are cutting budgets, you’ll see an even greater long-term return on your marketing investments. During an economic downturn, you will find that you will have less competition, which means it is easier and faster to break through and stimulate results. Deciding when and how to continue marketing can be a question of timing.
Instead of making deep reactionary cuts, objectively look at where you’re spending money and what kind of return you’re getting on that money. The key word here is objectively. If you spend on what makes you feel good or instinct or a hunch, that could be a cavalier mistake—one that could hurt you and your brand more than if you did nothing.
Recession Marketing Pro Tip: The trick to successful advertising during a recession lies in consumer psychology and emotion. A recession is a trying time for most consumers, and there’s an undercurrent of fear, worry, and stress beneath the surface. By tapping into and appealing to the emotional side of consumers you have a better chance of connecting with and persuading them.
Research shows that ad campaigns that focus on emotional engagement tend to be more profitable than ad campaigns that focus on rational messages (such as low prices or special offers), even when times are tough.
Regardless of your industry, your brand’s biggest asset during a recession will be your existing customer base.
Make sure your marketing strategies are focused on your most valuable, happy, loyal customers. Bend over backward to keep them happy, and be sure to reward their loyalty. These happy customers will repay you in the form of recommendations and reviews, especially if you can use analytics and data to show how you’re benefitting their company during rough times.
During an economic downturn, you will find that you will have less competition, which means it is easier and faster to break through and stimulate results.
As we collectively work to overcome the effects of coronavirus and transform the way we conduct business, we wish for everyone strength, good health, creativity and continued success.
Give Tom McManimon at StimulusBrand a call: 609.538.1126. We’re here to help.
Excerpts from Blue Corona Marketing: Recession Marketing: 5 rules to follow.