We are clearly in a period of huge uncertainty. Many forecasters see economic storm clouds gathering overhead, and if they are right then the next few years could prove very challenging for us all.
If the result of all this uncertainty really is an economic downturn, then we know from experience that the first response of many businesses will be to cut marketing spend. In fact, a recent survey by Marketing Week identified that up to 26% of respondents are already predicting budget cuts for the 2019/20 financial year, negatively impacting every media channel.
This “batten down the hatches” approach is perhaps an understandable reaction when businesses are anticipating that sales and revenue will drop.
But is it wise?
As the 2008-9 recession proved, slashing marketing spend and activity is an approach that can destroy value in much less time than it took to build it. Inevitably, any company that leaves a gap where their marketing focus used to be instantly creates a space for competitors, allowing usurpers and disrupters to more easily move in.
It can also inadvertently send out a signal that your brand is weak. This can be fatal – in a downturn, consumers are typically looking for stability and confidence wherever they can get it.
Cutting marketing in a recession also fails to recognise that a company’s main customer base still need to be nurtured and engaged. That statement may surprise those who assume that base customer loyalty is unswerving!
But your audiences will have their own response to any economic uncertainty. The last thing you want is for them to choose to reduce their spending with you, or switch to a competitor.
In the midst of recession and uncertainty it’s all too easy to fall into the trap of focusing solely on sales-oriented activities such as price promotions. But there is plenty of evidence to show that a marketing strategy which continues to nurture the connection between your brand and its customer base is vital.
It is this which will ultimately sustain your brand through the recession, and eventually help your business to stabilise and grow into the recovery.
Change for the better
Change is a characteristic of any downturn, for good and for bad.
You may find you acquire new customers, as well as lose some. You may also see changes relating to the audience segments you currently target. So a supermarket might see an influx of consumers buying its own-brand product range, even if this audience previously bought exclusively top-end brand products.
That said, it’s also been shown that many consumers remain reluctant to swap brands, even as things change around them. There is clearly something comforting about familiar, trusted brands and products. Or perhaps there’s a resolve and determination not to be beaten down by events, or even a belief that if you can hold on to some sense of normality, things can’t be that bad, can they?!
Whatever the dynamics of your particular market, your marketing team will be well placed not only to spot change but to take advantage of new opportunities as they present themselves during what is going to be an uncertain period of shifting loyalties and transformation.
Flying through the storm
So with all of that in mind, here are a few suggestions to might help in navigating your way through any tempestuous times that may lie ahead:
- Reinforce customers’ emotional connection with your brand and even demonstrate empathy (for example, conveying a sense that “we’ll get through this together”).
- As always, segmenting audience and creating relevant buyer personas that clarify the audience’s underlying concerns, their financial means, and their expected approach to a downturn, is an extremely helpful exercise to help tailor messages accordingly.
- Consider particularly how a downturn is likely to affect people differently depending on where they live or the sector in which they work. The impact of the economic crash in 2009 was felt very differently across the country for example, with some barely impacted at all. Others, meanwhile, are clearly still suffering ten years on as a consequence of the austerity measures put in place at the time.
- Flexibility is key, and requires an agile mind-set such that strategies and tactics can be adjusted. By all means assume any recession will be long and hard, but keep a weather eye out to respond quickly to change when it comes.
- And remember there are always market niches where your messages will carry greater traction, weight and influence. Never stop looking for them.
Pilots have a number of choices when it comes to setting a flight plan with a predicted storm within it. These might include delaying their flight time (possibly upsetting their paying customers), flying round it, over it, or even flying through it.
But what they DON’T tend to do is shut down an engine and reduce their principle means of staying airborne!
Economic downturns and recessions are hard for (almost) all businesses, as well as for the customers they serve. Hopefully the lessons learned from the 2008-9 recession mean that many more businesses are preparing with flight plans designed to maintain and build value, not destroy it.