How Brands Come Out Of Recession Strong
Recessions hurt customers and can kill brands if not responded to with bravery and creative problem-solving. Brands that do survive recessions are given the opportunity to emerge with less competition and more loyal customers. In some cases, even a new brand purpose.
But company leaders can get so tunnel-visioned by crisis and the short-term necessities, that not enough time is left to think about the future.
Scarier yet, we still don’t have much research on the successful survival strategies of brands from past recessions. There has been even less research on how to get ahead despite slowed growth, and how to be prepared for when the good times eventually do return.
Harvard Business Review did come to the rescue though, with an in-depth study into the “Strategy selection and corporate performance during the past three global recessions: the 1980 crisis (which lasted from 1980 to 1982), the 1990 slowdown (1990 to 1991), and the 2000 bust (2000 to 2002).” These findings, coupled with our brand knowledge and experience bringing clients out of tough times time and time again, have inspired us to write this article.
Even prior to Covid-19, the world was entering a period of great transformation, technologically, socially and economically. Now is your chance to grab your future unicorn at the horn, and disrupt.
First, Health Check.
Before marketing, comes brand.
We’ve all heard it. “Brands that spend more on marketing during a recession recover faster when the recession ends.”
Some companies have been hit harder than others, and we’re all still trying to cope with the initial hit of Covid-19. However, eventually, things will start to settle and recover. Brands that respond to their surroundings and plan ahead are significantly more likely to thrive when the new normal is here.
But first, check to make sure you have Mark Ritson’s three bases covered before you dive all in with your marketing spend.
1. Is your company able to fund an increase in spending?
2. Does your management team believe that marketing is a long-term investment, not a short-term cost?
3. Do you have the right strategy and content at your fingertips?
Assess the situation, don’t make assumptions.
What situation is your brand in right now? How will this change tomorrow, in a month from now, and in a year from now?
How will your brand strategy need to change for a post-lockdown world? What is begging to be innovated to make your customers’ lives easier?
How do you build brand awareness, desire and loyalty?
For more on brand planning during Covid-19, download our Brand Playbook here.
Let’s get to it. Is your brand totally prepared for the future? Probably not. Make sure your brand is doing these eight things to prepare for the recession and come out of it stronger than the brand next to you.
1. Don’t Relax Your Marketing
For many CEO’s, their first instinct in times of financial crisis can be to cut the marketing budget. Although marketing can be perceived as the easiest and least impactful area of the business (especially when it’s either that or top talent in other departments), this is an extremely short-sighted impulse.
In the 2008 study on marketing effectiveness by Field and Binet, industry experts found that “While cutting your marketing budget in the face of an economic downturn might help protect short-term profits, your brand is certain to be weaker and less profitable once the recession ends.”
2. Rethink Your Brand Positioning
Now is the perfect time to take a moment to reflect on your brand. Are you in the best possible position to face the challenges that are coming your way? Recessions make customers reevaluate their priorities and where they spend their money. You need to understand their behaviour shifts and how they will leave their mark on your industry.
A brand audit is a good place to start. This will give you an idea of where your brand is compared to your competitors. Keep your customers’ point of view top of mind as you audit, and opportunities will start to pop up.
3. Fine Tune Your Value Proposition
Your expertise may not change, nor should it. Your brand is good at what it does, so don’t flip flop to a category that just isn’t your speciality. However, your value proposition may need some fine-tuning. Take a look at your happiest customers… What are their favourite parts of your brand?
Focusing on the best areas of your offering can reveal a lot. By changing how you explain your offering slightly to be more relevant to recessionary periods, your brand will stay top of mind and relevant to your customers.
4. Focus on Your Values To Prove Brand Value
In many ways, brands are in the same boat as customers. We’re all trying to understand value. The biggest fans of your brand are the most expensive to replace, and by reminding them of the value your brand offers them, you can increase their loyalty.
Zoom in on your core brand values. Line those up next to what you offer. How can you better communicate these to your customers so they know no matter what, your brand is the go to brand for their specific need.
5. Explore New Audiences
Look for opportunities in new audience segments. Repositioning your brand to speak to different demographics is much less painful than going down with the ship. You can even consider international markets and new product development. Recessions can also be great times to start a new venture. The competition will be less fierce, and if you’re offering is unique, it will be more likely to get noticed by those who need it.
6. Take The Opportunity
New opportunities pop up in unexpected places at times like these. If you know where to look, and have the resources to pounce on them when you see them, you can be prepared to profit massively when times get better.
The slowest years are the best for focusing on innovation.
7. Don’t Just Plod Along
If business slows, use this time to innovate. Experiment with different ideas and communication tactics. Solve your customers problems and make life easier for them. Research your audience and get to know them better on a personal level. Ask them what they like, what they don’t, and what they wish they had right now.
8. Think Big
Brands like Netflix and Lego have actually grown during past recessions. Don’t be afraid to think big and expand your businesses once you’ve done your research and it makes sense for you too. Taking risks is always important in successful companies, and taking well-educated risks during recessionary periods can pay off tenfold.
With recessions come change, and change can be really unpredictable and uncomfortable. What we can definitively say is that whatever changes do occur, they will shape markets for years to come. The brands that come out swinging at the end of it all, will be those who understood where to look for opportunities and we’re brave enough to take them.
Preparation is the first step. Sit down for some much needed brand planning if you haven’t already. You can even sit down with us if that helps.