Branding or Bust.
Every time a recession rolls around, so does the question of whether to dial back your marketing. One thing to keep in mind is, whether in boom times or a downturn, whenever you stop promoting your brand you inevitably begin to lose “mind share” with your audience. Mind share is that ever-changing level of brand awareness among your customers. Typically, when consumers think of a particular product or service, a limited number of brands come to mind. To survive in today’s over-saturated marketplace, it’s imperative that you keep your brand on that short list. Brands that protect their equity during a recession will be better positioned to rebound and grow when the economy turns around, while those that go dark may find that recapturing lost mind share is difficult and costly.
Of course, it’s important to keep promoting your brand regardless of the economic environment, but downturns present unique opportunities. Because most companies tend to cut their marketing budgets during recessions, the advertising “noise” level is usually lower, which means your message can better break through. This can give you a chance to grab more mind share while your competitors are relatively quiet and, in turn, capture more of the market.
One example of a brand that captured more market share during a recession happened in the early 70s. When the energy crisis hit, Toyota was not the leading import car maker in the United States. When gas prices spiked and the ensuing recession set in, many carmakers slashed their ad budgets. Toyota, however, stuck to their long-term marketing strategy, and by 1976, had overtaken Volkswagen as the leading import carmaker in the United States. There are other subtler benefits to marketing during a downturn, as well. Brands that continue marketing when times are tough will be viewed as strong and resilient. In addition, the cost of marketing often drops during a recession, so you can get more bang for your advertising buck. A downturn can also provide you with a good window in which to introduce a new product or even implement a re-positioning of your brand.
So, what actions should you take during a recession?
1 | Protect your investment.
Start by focusing your marketing on the hard-won customers you already have. It’s far less expensive and less work to stay in touch with your existing clients than it is trying to capture new ones. So, keep engaging with your audience.
2 | Enhance your online presence
During a downturn, it’s important that all your customers and potential customers know that you are, indeed, still open for business. Keep engaging with them. Inform them of any changes you’ve made to the business, let them know about any recent successes, and be sure to announce any specials you’re offering.
3 | Revisit your budget allocation
You’ve probably been threatening to do a deep dive into which channels are performing well and which ones aren’t, anyway. What better time to make a few adjustments than right now?
4 | Consider “pandemic pricing”
With so many businesses struggling, a short-term pricing incentive help can lift sales and increase market share. You can restore your standard pricing schedule once the economy recovers.