Marketers, if you haven’t yet, it’s time to locate your umbrellas and prepare for what increasingly looks like a brewing economic storm.
Despite the best efforts of central banks, inflation remains high, some sectors have announced layoffs, and unpredictable events in Ukraine and elsewhere shake confidence.
“These are very, very serious things which I think are…likely to put the U.S. in some kind of recession six to nine months from now,” Jamie Dimon, CEO of JPMorgan Chase, the world’s largest bank, told CNBC in October.
Fortunately, there are steps marketers and their organizations can take to protect themselves from the severest of recession impacts.
Marketing in a Recession: 5 Steps to Take Now
|
Stay Close to Your Customers
Your customers also are reaching for their umbrellas and thinking about how to shore up their businesses or their households. What steps are they taking? What concerns keep them up at night? What impacts do they anticipate? And, most importantly, how can your product or service alleviate predicted pain?
Answers to these questions provide valuable and strategic insights that will help you make the best marketing – and business – decisions should the skies open up. Whether you partner with a firm like Brand Federation or conduct research on your own, now’s the time to get closer to your customers.
Leverage Insight for Innovation
Getting closer to your customers bolsters relationships and stems attrition when the going gets tough. It also delivers valuable insight for product or service innovation.
Recessions typically run about 17 months, on average. Putting new customer insights into product R&D during this time prepares you to exceed customer expectations and lean into a recovery when it comes, leaving competitors to catch up.
Adopt an Investment Mindset
Indeed, research over the decades shows that companies that keep up their level of marketing spend tend to accelerate growth when storm clouds clear.
A McGraw-Hill study in the ‘80s found businesses that maintained or increased advertising spending during the ‘80-’81 recession had sales 256% higher than companies that cut spending. More recently, Bain found similar results in a 2019 study, Companies that continued marketing vigorously during the 2008 recession enjoyed a 17% annual growth rate compared to 0% for those that didn’t.
It’s prudent to review all costs very carefully before and during a recession. But don’t lose sight of brighter days ahead. Marketing through a downturn is an investment in them.
Avoid Knee-Jerk Reactions
Maintaining strategic marketing investments can position your firm for a rocket of a rebound when conditions improve because most competitors don’t make the investment. They hunker down, slashing and burning costs, taking market momentum down to zero.
This common knee-jerk reaction in the face of a slowdown cedes opportunity to competitors who stay in the marketing game. Marketers that take a deep breath, think strategically and keep the pedal down during a recession grab a higher share of voice, connect with new customers, and strengthen brand relationships because the arena is far less crowded.
Keep Your Perspective
Recessions are inevitable. As they approach, it pays to think through where you want to be when they inevitably pass and a new cycle begins.
Where you don’t want to be is in rebuilding mode when the economy cranks back up.
Grabbing your umbrella and taking these strategic steps instead of waiting the storm out ensures that you won’t.
ABOUT THE AUTHOR
Matt Williams is chief growth officer and managing partner for Brand Federation. Prior to joining Brand Federation in 2019, Matt was CEO of The Martin Agency, one of the world’s most creatively recognized advertising agencies. Over his 26-year career at Martin, he helped the agency become the 25th-largest in the US and managed brand strategy development for world-class brands like GEICO, OREO, UPS, Discover Financial, Walmart, and Benjamin Moore. Matt also is a Clinical Professor in the marketing department at the Mason School of Business at William & Mary. He teaches in the MBA program and is the developer and Faculty Director of the school’s Online Masters in Marketing.
ABOUT BRAND FEDERATION
Brand Federation is a strategic consultancy of nationally-recognized brand strategists backed by a global network of the world’s best independent specialists.