Recession Marketing
Jan/17/09 13:34
For anyone trying to grow a business (both clients and service providers) today’s economic climate seems to bring nothing but bad news. Fear, Uncertainty, and Doubt (FUD) is worn on the corporate faces of many organizations and is often reflected in the spending plans and bottom lines as plans are downsized and employees run for cover hoping it will end soon.
For anyone trying to grow a business, today’s economic climate seems to bring nothing but bad news. Fear, Uncertainty, and Doubt (FUD) is worn on the corporate faces of many organizations and is often reflected in the spending plans and bottom lines as plans are downsized and employees run for cover hoping it will end soon.
Often, when the budget cutting begins, marketing is the first target. Makes sense, right? Maybe not.
A recent study by University of Texas and Pennsylvania State University, Turning adversity into advantage: Does proactive marketing during a recession pay off, found that organizations that have a proactive marketing response in a recession achieve superior business performance even during the recession.
The study finds that there are three key traits an organization should have in order to make this type of approach successful:
It may seem self-serving to say it, but cutting your marketing budget is one of the first mistakes businesses make during times of economic crisis. But all you have to do is a little bit of historical research to discover that there is truth to this statement.
According to Terry Brock, Marketing and Technology Coach, “Tough times have a lot of benefits for those that have that indomitable spirit to succeed. What many don’t realize is that tough times create enormous opportunities for those willing to seize the moment.”
When you cut or eliminate marketing, you in affect are sending a message to the market that you
are closed for business. When times where good, organizations would pump resources into building a brand message and the assets to support that message. Once marketing is turned off, that investment begins to loose value. To re-establish a positive image of your brand once it has gone “dark”, is very costly and often impossible to overcome the negative impression in the mind of the consumer.
FUD and the Consumer
A major mistake many organizations make is basing strategy and tactics on pre-recession consumer profiles. As your business has adapted to the recessionary climate, so has the consumer. The key is to know your consumer inside and out. Know how these economic times are hitting them. Create your message around the challenges they are facing while being flexible and constantly assessing the market.
A recession means more risk-adverse buyers, which leads to a tendency to go with "safe" and established solutions. Companies need to do more than ever to reassure and build trust. Tactically, this means including customer success stories, reviews, expert opinions, and other validation as part of your marketing. Strategically, a recession means fewer risk takers and visionaries
No EASY Button
FUD strikes at the heart of even the most seasoned business professional. There is no EASY button that we can press to improve the current macro economic climate. All we can do is focus on the caring and feeding of our businesses using smart, logical, and unemotional strategies and tactics.
Success can and will happen in this environment, but it is less likely if marketing is not involved.
Often, when the budget cutting begins, marketing is the first target. Makes sense, right? Maybe not.
A recent study by University of Texas and Pennsylvania State University, Turning adversity into advantage: Does proactive marketing during a recession pay off, found that organizations that have a proactive marketing response in a recession achieve superior business performance even during the recession.
The study finds that there are three key traits an organization should have in order to make this type of approach successful:
- An Emphasis on Strategic Marketing - Successful companies already used segmentation to differentiate customers and personalized marketing communications to develop strongly positioned brands. These provided a foundation for proactively marketing to customers
- An Entrepreneurial Culture - Companies saw the recession as an opportunity to gain an edge over the competition and invested in risky new proactive marketing to customers
- Enough Slack Resources to Refocus on Proactive Marketing - Companies had underutilized resources such as staff, cash reserves and production capacity that they could quickly refocus on proactively marketing to customers.
- Proctor and Gamble - During the Great Depression they pushed Ivory soap.
- Intel - In 1990-1991 during economic difficulty they pushed out the campaign “Intel Inside”.
- Walmart - Walmart launched their “Every Day Low Prices” campaign in 2000-2001.
It may seem self-serving to say it, but cutting your marketing budget is one of the first mistakes businesses make during times of economic crisis. But all you have to do is a little bit of historical research to discover that there is truth to this statement.
According to Terry Brock, Marketing and Technology Coach, “Tough times have a lot of benefits for those that have that indomitable spirit to succeed. What many don’t realize is that tough times create enormous opportunities for those willing to seize the moment.”
When you cut or eliminate marketing, you in affect are sending a message to the market that you
FUD and the Consumer
A major mistake many organizations make is basing strategy and tactics on pre-recession consumer profiles. As your business has adapted to the recessionary climate, so has the consumer. The key is to know your consumer inside and out. Know how these economic times are hitting them. Create your message around the challenges they are facing while being flexible and constantly assessing the market.
A recession means more risk-adverse buyers, which leads to a tendency to go with "safe" and established solutions. Companies need to do more than ever to reassure and build trust. Tactically, this means including customer success stories, reviews, expert opinions, and other validation as part of your marketing. Strategically, a recession means fewer risk takers and visionaries
No EASY Button
FUD strikes at the heart of even the most seasoned business professional. There is no EASY button that we can press to improve the current macro economic climate. All we can do is focus on the caring and feeding of our businesses using smart, logical, and unemotional strategies and tactics.
Success can and will happen in this environment, but it is less likely if marketing is not involved.