Advertising: the unexpected recession essential
When times are hard and pennies need to be pinched, the first thing to be cut in many a budget is advertising. I get it. It’s logical, right? Drop excess spending to keep the train on track. Well yes, and, frankly, no. It may seem shrewd, but cutting your advertising during a recession can not only cause you losses but cost your business growth.
By holding your nerve and strategically repositioning your advertising spend to be customer-centric, you can not just help your organisation avoid a nasty nosedive, but become a hive buzzing with profit.
Keep your train running AND fully boarded with these important insights:
DON’T CUT SPEND – BUT CHANGE UP WHERE YOU USE IT
We’ve got previous recessions to learn from, and the takeaway when it comes to advertising is clear – that brands who cut back, instead of getting creative with what they do have, take huge hits to profit margins and miss out on exponential growth.
Cutting your advertising budget may save you some spend in the immediate term, but in the long run your brand will suffer. The McGraw Hill study findings on this were clear: “Companies who continued to advertise during the two-year recession saw 256% higher sales than their counterparts post-recession.” The data doesn’t lie: the 2008 recession showed us just how pivotal putting advertising first is. So, what can you do to maximise the impact of your marketing when times are tough?
1. Focus on brand longevity over performance marketing
While demand is diminished as customers tighten their purse strings, channel budget to where it can have the most impact: on your brand. Even as sales go down and everyone is questioning your sanity. Why? Because recessions don’t last forever, and strong brands bounce back – with increased market share to boot. Brands that kept advertising during the 2008 recession saw a 1.3% increase in market share. Hold that future focus and it will benefit the whole company for years to come.
2. Maintain SOV
Losing share of voice (SOV) leads to losing market share, which is an expensive and costly way to save money in the short-term. Rather than taking ten steps back, move forwards. Hold you SOV and forge out more by using cheaper media streams that allow for a higher ROI. Maintain your brand’s SOV and even ESOV by increased proportion on brand building.
3. Stand out for all the right reasons
I appreciate I’m not recreating the wheel here – this topic has been extensively written about – but I do want to throw my two pennies’ worth into the mix. And that’s the importance of including meaningful creative and intelligent CX into your arsenal during times of increased customer uncertainty. Get resourceful and creative about how you present yourself during hard financial times, but don’t make it all about you. Infuse empathy and connection into your branding using customer insight. Know who you are, yes, but also gain a strong sense of who your customers are and what they need during challenging times.
CONSISTENT AND CREATIVE
This ties in nicely with my next point – be creative and consistent. During uncertain times, customers need reliability and prefer brands that don’t feel risky. Find ways to creatively stand out but keep your messaging simple and show yourself to be the safe choice – consistently. Consistency is key, as it’s what backs up your messaging through the building of trust over time.
But this doesn’t mean your marketing needs to be predictable and lifeless. You need to give people a reason to engage with your brand – is it compelling, bold, thought-provoking or entertaining? Avoid blending in with the crowd and show some personality; after all, that’s the unique value your brand can deliver over your competitors. Comfort and entertain your customers during difficult times and they’ll stand by you through good times and bad, because they know you will stand with them too.
SOUNDS GREAT, DOESN’T IT? BUT HOW DO YOU ACTION THIS IN THE DAY-TO-DAY?
WITH CX THAT DELIVERS
Increase value by prioritising excellent customer experience across the entirety of the customer journey. A well-mapped CX journey reduces price sensitivity, as strong brands are more price-elastic – which is so important with increasing inflation and rising costs.
The key to the right CX journey is the right insight. You need to be prepared and gather as much customer insight as possible, from a range of sources, for the clearest picture of your customers – and what they need and desire. Do you truly know what the genuine concerns and anxieties of your customers are? Do you know as a result what value they place on your brand?
Each customer base responds differently to economic pressures. Now is the time to start really understanding this, and adjusting how you connect with your customers accordingly [10]. Change up your messaging and tweak your targeting strategies, just like Tesco did during lockdown.
Taking that insight, infusing it into your brand creatively will demonstrate that you know your customers, and you’re both an interesting and safe brand they can rely on. Through the day-to-day interactions with your customers, show you go beyond talking the talk by building insights into your brand offering as a whole, from online to in-person touch points. It’s those consistent little touches on the journey that show you know them, that you care and can meet what they’ve come to you for – without having to be asked. Pre-empt the need and then meet it. Go beyond utility: delight.
By meeting customers’ immediate needs and addressing their most prominent concerns, you’ll build that all-important trust – and it will be authentic and well-earned. According to a report by Edelman, brands grow out of a trust-based relationship with their customer – with trust being the second most important factor in the decision to buy a new brand (53%) or become a loyal customer (49%).
NEXT STEPS
To get started, get talking with your clients and agencies. Ask clients and peers about their concerns, recessionary strategies and how you can work together to weather the storm.
As we live in an experience economy, the winning and losing brands will be determined by the experiences they deliver.
