Each time when there is a recession marketeers find themselves in poorly charted waters because no two downturns are identical.
We have many marketing stories since 1970 on how thousands of companies have navigated recessions by identifying patterns in consumers’ behaviour and firms’ strategies that either propel or undermine performance.
Companies need to understand the evolving consumption tastes, patterns, decision drivers and align their strategies to stay competitive and thus profitable. During recessions, of course, consumers change their priorities to manage their depleted budgets.
As sales begin to drop, businesses typically cut costs, reduce prices, and postpone new investments. Marketing investments in areas from brand communications to consumer research are often slashed across the board but such indiscriminate cost cutting can be a mistake unless consequences have been fully analyzed and you have an alternate long term growth strategy intact.
Brand building is about long-range value of your business. It cannot be reserved only for growth times. Brands are built over years and during a recession they get the chance to be considered by consumers who would otherwise not take notice or see relevance. Certain companies accelerate during a recession, seeing the downturn as an opportunity and raising their marketing investments. Certainly, marketers are in a tough situation and they have to decide how to continue to support the brand building process.
Make your brand more relevant
Marketeers have to be at their best when the chips are down. The arrival of recession is the time when marketers have to change tactics and create new ways to provide brand value in a more relevant and meaningful way.
More than ever, the recession gives marketeers an imperative to rate their brand building process. However, the brand building process is seen as a luxury in an economic downturn by most businesses.
Cutting the brand building investment is the easiest option but if a company wishes to succeed in the long run it must consider investing money smartly behind fewer but strategic brand building initiatives. Many contend that a recession is the time to forget focusing on brand building and to concentrate on stimulating sales.
This is important to keep your cash-flow going, so no one can stay away from that. But unless you keep the long term brand building process in check to benefit from the market recovery following the recession, they will destroy the brand with their own hands and they will shout out loud that they are vanquished by the tough situation.
Therefore, the marketing approach should remain more focused on brand building than hard-selling in spite of what may seem more practical and safe in the short-term.
During uncertain times, we as human beings tend to place our trust in those people we believe truly understand us. Similarly, empathy becomes an important source of brand differentiation during a recessionary period. When every cent matters we accept fewer risks and are likely to choose brands that are highly relevant to our immediate needs. We look for products that represent a genuine value, not because of a price promotion, but because they deliver on their promise.
Empathy is an essential ingredient in brand equity building, even during good times. Staying on top is about focusing on long-term goals, continuous engagement with clients and employees and bringing empathy to the brand building process. More frequent and empathetic communication can hugely help you in achieving this.
Recession is a new opportunity
Brand building during a recession is not an impossible task. If you have some money that you plan to invest in a marketing strategy, this is the perfect time to consider a brand building program for your business.
The reason is because during a recession there are more people who choose to stay home to save money. It’s a scary time, and they don’t want to spend money. On the other hand, brand building during a recession will provide you some competitive space and is going to be a bit cheaper for you to do it.
Prices are cheaper for everything in such times and this is the part of a recession that you must take advantage of.
The effort that you put into brand building is going to increase your brand recognition during and even after the uncertain times.
With so many companies falling in the recession, the tricky trap is no better time for your business to begin an extensive brand building program. Consider all the options before you begin sinking money into marketing enterprises and steer your budget toward a long-term strategy such as a brand building process.
Recessions change the marketing landscape unexpectedly. So, be open and seek examples of strong brand building done by other companies in the face of declining competition. It’s an entry point for brands that are determined to make a strong start.
Remember that brand building is about long-term thinking and brand building in a recession is about taking advantage of tough times. Explore the topic of brand building not in terms of growing share of profit, but in terms of reaching dedicated customers for a long-lasting relationship.
Most importantly, remember that the brands that endeavour and succeed in building their brand in a recession will be best placed to enjoy the results of their labour when the economy inevitably returns to growth.