Marketing in a recession. Another pov.
A few weeks ago we carried David Notolli’s piece on what brands can do in a recession. Here’s a more, in-depth view from research agency Millward Brown.
The Conclusion. During recessions, consumers and marketers alike must make the best of a bad situation. Not every brand will cut spending, but many of those that do will find themselves at a dis-advantage when the recession ends. Marketers need to make the most of every dollar spent in support of their brands if they hope to maintain strong consumer relationships. Those that succeed should then be well positioned to take advantage of weaker competition when the good times return.
The key to success during a downturn is maintaining focus. Keep your wits about you and focus on four things: your competition, your brand, your customers, and your communication. If you have a strong, successful brand, focus on what has worked for you so far. If your brand is in a relatively weak position, focus on systematically exploiting what strengths you have while addressing your weaknesses.
Concentrate on your core brands and products. Just like what David wrote, brand needs to support their core proposition and emphasize its value. Strong brands can support a price premium. Consu-mers have clear and strong associations with these brands and know what makes them desirable. Focus your marketing effort on reinforcing what made your brand successful in the first place.
Don’t cut quality. As the pressure to find cost savings increases, companies may be tempted to cut back on the quality of their products or services.
Think internal branding and morale. The motivation level of employees is critical to a company’s success, particularly in service industries. Therefore, workers need to be convinced of the merits of their brand and reassured that their jobs are safe. Use internal communication to remind your staff that they make a difference.
Focus on Your Customers. Keep in touch. Whether the category is B2C or B2B, a brand’s biggest asset during a recession is its existing customer base.
Focus on Your Communication. Review your budget allocations. Your customers are looking to maximize their value for money. You should do the same. Think about the relative cost and effectiveness of the available media channels. You may conclude that you can’t afford to completely pass on TV, but you can extend your TV investment in less expensive media like print, radio and outdoor advertising.
Make your creative work harder. In any communication channel, the best way to leverage your spend is to put it behind high-quality creative. A meta-analysis of econometric sales modeling published in Admap (February 2006) found creative to be the biggest potential multiplier of profit (other than market size). Across a wide variety of categories, brands, and channels, Paul Dyson and Karl Weaver found that creative had five times as much impact on profit as did budget allocation.