What to Do in an Economic Crisis
When the economy is doing well, your business should be advertising. When the economy is down, your company MUST be advertising.
Advertising and marketing are a staple for all businesses, and studies from past recessions have shown that it is possible to grow during these hard times by continuing to advertise or even strategically increasing your advertising budget.
Certain companies can accelerate during a recession by viewing the downturn in the market as an opportunity and investing more into building their brand. Unfortunately, businesses tend to turn their focus to hard-selling to keep going in the short-term, but their marketing approach should remain focused on brand building to provide long-term benefits.
Build Customer Loyalty and Improve Brand Strength
The term “loyalty” is not always used in the proper context when referring to consumers and businesses. Most organizations think customers should be loyal to them when it really should be the other way around. A brand should be loyal to its customers, constantly working to offer more value to them than competitors.
When there is an economic downturn, a business does not want to cut back on their ad spend because this can make a business lose its “share of mind” with its consumers and lead to the potential loss of current and future sales. Instead, consider re-evaluating and restructuring the current digital ad spends to focus on what is relevant to your customer’s needs during the economic crisis to maintain/gain their loyalty.
Gear your focus on keeping up customer engagement. Show that your brand empathizes with the consumer during this stressful time. A good way to engage your consumers is to encourage feedback from them and let them know you are still here to serve them. You can also improve existing loyalty programs or offer education/training about your brand.
All of these options and more can maintain or increase your brand loyalty not only in the short-term but in the long-term as well. Project corporate stability to the consumer during this time and create new ways to provide brand value.
Stay Ahead of the Competition
By continuing or increasing your marketing spend when your competitors are cutting back, you can amplify your voice among your competitors.
A good example of pulling ahead of the competition during a recession can be found by studying the relationship between Post and Kellogs during The Great Depression in 1930. Going into this sad time, Post was the leader in the dry cereal industry, but they decided to cut their ad spend budget, as most businesses do during hard economic times. Conversely, Kellogs decided to double their ad spend budget and introduced a new product, Rice Krispies, which we are all still very familiar with today. Through this bold action, Kellogs was able to come out of The Great Depression with a 30% profit increase and claimed position as the industry leader, which they have maintained to this day.
When the economy is in a downturn, your ads are more likely to be seen if you continue to be present during this time. Your ads will also be better remembered by your consumers when other businesses start marketing again.
When other businesses cut their ad budget, be the brand that maintains and increases messaging. You’ll earn the long-lasting boost in sales and market share that past businesses have demonstrated is the case during these times.
Keep Your Brand Awareness
Your ads are more likely to be seen now than ever before, due to fewer ads being run in the market during an economic crisis. You could also use the lull in the market as an opportunity to reposition your brand or introduce a new product.
During a recession, a consumer understandably reassesses their spending habits. As an organization, you want to remain present and relevant to their buying cycle. This is the perfect time to experiment with new ideas, and to see if there is an innovative way to improve awareness of your brand. You now have more time to pursue projects that you have been too busy to consider in the past. This time could even be used to launch new offerings to smaller customer segments.
Our team at NetGain would like to take this time to reassure our clients that we will be here working alongside you through these uncertain times. Our first priority is to keep your business active and present within your customer’s “share of mind,” and together, we can transform a challenging situation into a limitless opportunity.
Please feel free to contact us with any questions you may have.