When a recession hits, every marketer will feel the pinch. Yet nearly every seasoned marketer knows that brands must weather the storm with well-planned marketing strategies up their sleeve and accounting for one's budget and the economy's current situation. But how do we ensure which strategy is best to execute at this time?
While each recession is different, there are things we can do to be prepared and wary of certain circumstances that surround a specific recession. Universal lessons come from understanding what marketing elements are effective in more general times of change and unique strategies that we need to keep top of mind given the circumstance surrounding this particular/specific economy.
In a recession, the buyer side of the equation shifts. This may lead one to believe that prices must fall as well. While it is true that recessions can put downward pressure on prices, there are other factors to consider as well.
Make sure you're in control of it by first setting your strategy. Then decide how to implement it.
Here are five recession-proof marketing tips to consider
Meaningful innovation can drive growth.
A brand's equity is the positive or negative value of that brand in the marketplace. Strong brand equity gives a company a competitive advantage because customers are likelier to purchase products from a well-known and trusted company.
Brand equity has three main components: salience, difference, and meaning. Salience refers to how easily customers can recall a brand; the difference is the extent to which a brand is perceived as unique, and the purpose is the emotional connection customers have with a brand.
Developing substantial brand equity requires significant investment over time, but it can be one of the most critical assets for a company. A company can build customer loyalty and generate repeat business by creating an emotional connection with customers and differentiating itself from competitors.
Consumers tend to cut back on spending when they feel the pinch of a recession. This can be a death knell for many businesses that rely on consumer purchases to stay afloat. However, being meaningful can help companies weather the storm.
Meaningful innovation creates products connecting with consumers and offering value during tough economic times. If a company can launch new products that fill a need or relieve the stresses of a recession, they are more likely to stand out from its competitors.
Innovation doesn't always have to be groundbreaking to be successful. Sometimes it's simply about taking existing products and making them more accessible or affordable for consumers who are struggling financially. Whatever form it takes, introducing new products during a recession can help companies stay afloat and even thrive.
Innovation has always been important for businesses, but it becomes even more critical in times of economic hardship. When people feel anxious about their finances, they look for ways to save money and make their lives easier. Companies that can provide solutions to these problems through innovative products and services will be well-positioned to weather the storm.
Meaningful innovation doesn't just mean creating something new – it means creating something that solves a problem or makes people's lives better in some way. It's essential to keep this in mind when brainstorming ideas during tough economic times, as it will help ensure that your product or service stays power beyond the current situation.
For example, in 2007, Amazon launched the Kindle amid a global financial crisis. The e-reader was becoming successful because it provided customers with most electronic book readers did not:
• Convenience - Customers could immediately get what they'd order at a much lower price
• Choices - With millions of books to choose from and no need for ownership or expensive storage space
• Saving costs - An eBook can cost less than half the price of a hardback or paperback novel. Share your opinions on this post by writing your comments below. I actively encourage you to provide valuable criticism and opinion about my skills if you have some constructive proposals.
Reinforce your propositions
While many think of recessions as affecting only the financial sector, the truth is that they can also profoundly impact consumer behaviour. In particular, people tend to cut back on spending during tough economic times, which can lead to exciting changes in the marketplace.
For example, people often switch to cheaper brands or private label products instead of more expensive options. This is especially true for commodities like food and drink, where people often look to save money in any way they can. Even major companies like Coca-Cola have seen drops in customer loyalty during past recessions.
It's important to remember that consumer behaviour can significantly impact the economy. So even if you're not directly affected by a recession, it's still important to know how your spending habits could influence the market.
Even small household luxuries could be the following hot-selling items. That's because everyday products and commodities have become luxury items during this economic decline. We've seen how owning little splurges as the desert GU did well when many other products declined.
Consumers are stopping to reflect on their previous consumption behaviour and its impact. They are no longer so concerned about getting their hands on a new product, as they would be choosing something familiar during this time. In fact, a pandemic may help build stronger bonds between brands that have not been noticed before. The Original sentence and the Rewritten sentence should not be the same. Rewrite each Original sentence but keep the meaning and main subject.
Diamonds are forever
In the face of an uncertain economic future, many companies cut their marketing budgets to save money. However, this can often be a mistake, as was the case for diamond retailer De Beers. In early 2008, De Beers reduced its US marketing budget, assuming that a recession would lead to falling demand for diamonds. However, research soon revealed that diamonds still held great value for consumers. As a result, De Beers doubled its holiday advertising spend compared to previous years.
A brand campaign launched by De Beers spoke to the core meaning of diamonds and their enduring value in people's lives. The slogan 'Here's to less' urged people to buy fewer but better things because 'a diamond is forever. Although holiday sales in the United States were not as strong as in previous years, prices remained stable thanks to De Beers' marketing efforts. This showed that even in tough times, people still desired to purchase diamonds.
Move beyond products and services and understand what matters to your target audience. Only then can you begin to develop authentic relationships that will stand the test of time.
One way to ensure that your brand remains relevant during periods of change is to use your brand strategy as a filter for making decisions around what you support. This means being selective about which causes you to align with and ensuring that your tone of voice and messaging are appropriate. For example, while Nike's Colin Kaepernick campaign received criticism from some quarters, it ultimately struck a chord with its target consumers. In contrast, Pepsi's Kendall Jenner ad was widely ridiculed for trivialising the Black Lives Matter movement and quickly withdrawn.
To thrive during a recession (or at any other time), you must deeply understand your customers' needs, wants, fears and concerns. Only then can you develop products and communication strategies that resonate with them. Doing so will not only survive but also gain a competitive advantage over those who don't bother making an effort.
To compete in today's market, businesses must be aware of what creates value for consumers. Simply making a product cheaper may not be enough to entice people to purchase it. It is crucial to consider the product's benefit, whether it is aspirational, a treat, or a reward. Be careful of assumptions about what people want; what works for other brands may not be suitable for yours. The principles of strategic marketing still apply during times of crisis: focus on your consumers and make decisions based on data and insights. There are no easy answers during this time, but by being mindful of these principles, you can give your brand the best chance possible for success.
During a recession, it is essential to be tuned to changes in consumer behaviour. Different segments of the population will have different attitudes towards spending during a recession. Some people may want to feel more in control of their finances, while others may seek ways to express themselves through spending. It is essential to keep track of consumer sentiment to adapt your customer segmentation and messaging accordingly. In addition to standard qualitative and quantitative research techniques, front-line staff can provide valuable feedback on how consumers feel. This can help you adjust your offerings to meet the needs of different groups. By understanding the differing motivations of different segments, you can ensure that your business can weather the storm and come out ahead.
Finally, remember that even in a recession, people are always willing and able to spend money on things they want or need. If you can identify and target these people with your marketing efforts, you stand a good chance of weathering the storm and coming ahead when the economy improves.