Three Tips For Marketing In Recession
We’ve had recessions before, and the argument has long been made for why brands must market their way through a downturn. But what about the nuance of that marketing? Where should the emphasis lie to ensure the best use of budget and how can companies be certain their strategy is fitting for the more torrid market conditions?
While recessions come in all shapes and sizes – different regions, sectors, social groups suffer to greater or lesser degrees – there are universal lessons we can apply that come from understanding what elements of marketing are effective in more general times of change, as well as specific considerations we need to keep top of mind, given the circumstances that surround a specific recession.
Meaningful Innovation Can Drive Growth
WPP’s brand valuation tool, Brand Z, considers three measures of brand equity: salience, difference and meaning. In times of change, salience – being able to recognise a brand – and difference – how it stands out from other brands in its category – remain critical and necessary to keep a brand afloat.
But being meaningful can be a key driver for growth and meaningfully innovating is a way for companies to both survive and thrive in a recession. Creating and launching new products that not only connect with consumers but also add value to their lives during a recession, gives companies and their products greater potential for brand standout when competitor brands go quiet or fewer innovations hit the market.
For example, Amazon launched the Kindle in 2007 amid the global financial crash. While Amazon was a well-established brand and the device had a point of difference, these are not the reasons it was successful; the Kindle’s success was because it added meaningful value to consumers’ lives. It gave them instant access to a library of millions of books at lower prices. It added convenience, choice and cost savings. By 2009, eBooks were outselling traditional paper books for the first time in history.
Reinforce Core Propositions
During past recessions, consumers have cut down on spending, affecting commodity items such as food and drink, with people choosing cheaper options, like private label, in place of the more expensive brands. In the financial crisis even drinks giant Coca-Cola saw a 25% drop in customer loyalty.
History might not repeat itself in this case, exactly. The impending recession is quite different from many others in recent history due to the shifts in consumer mindsets coming out of the COVID-19 pandemic. Certain products have taken on a new meaning to consumers.
Everyday commodities and products have become luxury items during this health crisis, and we’ve seen how small indulgences or luxuries fare well in economic downturns. Chances are many households will continue to stock up on things like frozen foods, Purell and Lysol, regardless of the economic climate.
Additionally, while the current scarcity of consumers’ favourite products has highlighted that many have been willing to try new products, we’ve not seen a decrease in demand for the brands people typically buy. If anything, the pandemic might be forging deeper connections between people and their trusted brands. Getting one’s hands on a favourite cereal or coffee during this health crisis has provided moments of pleasure for many, ones that will be hard to forget and that will make it difficult for consumers to walk away from the brands they favour.
As we come out of this health crisis and dive into a financial one, it is vital for brands to stabilise and ensure consumers are reminded of the brand’s core proposition, and why that brand is meaningful to them.
Look at the example of diamond retailer De Beers. In early 2008, in response to the grim economic outlook, it reduced its US marketing budget, assuming a recession would result in falling demand for diamonds.
It changed tack when research revealed that diamonds represent enduring value to most consumers; the company doubled its holiday advertising spending compared with the previous years. A brand campaign spoke to the core meaning of a diamond and the value it has in people’s lives: it proclaimed, ‘Here’s to less’, and urged people to buy ‘fewer, better things’ because ‘a diamond is forever’. Although holiday sales in the United States softened compared with the previous year’s, prices were stable – and people’s desire to buy diamonds remained healthy.
Leverage Brand Authenticity
Understanding and supporting what matters to your target consumers, moving beyond your products, services and core proposition is another way to meaningfully connect with consumers and is central to marketing through a recession, or any time of change. The keys to success here are being authentic to your brand, which includes using your brand strategy as a filter for making decisions around what you support and ensuring your tone of voice and messaging are used appropriately – because how you say something is as important what you say.
Two examples, from Nike and Pepsi, may not have taken place in a recession, but in the differing ways they used their brands during periods of racial tension in the US, they demonstrate why brand authenticity is so important.
While Nike launched its Colin Kaepernick campaign – a hard-hitting piece that drew much criticism but which ultimately resonated with its audience – Pepsi created an ad featuring Kendall Jenner at a protest. The Pepsi ad was ridiculed and criticised for trivialising the Black Lives Matter campaign and, having clearly misread the way society was thinking at that time, the soft drinks brand swiftly pulled the ad. Messaging is everything – both brands had come out in support of a cause, but Nike’s was in an authentic way, using someone who was already taking a radical stance.
In a recession, more than ever, marketers must understand how their brand’s customers feel, what their needs and wants are, what their insecurities are, what they’re worried about and then develop meaningful products and communicate in meaningful ways to thrive, survive and gain competitive advantage.