With turbulent economic times projected for the year ahead, the common response from brands is to batten down the hatches and ride out the wave; advertising and marketing budgets are cut, and projects are shelved or delayed. It’s true, recessionary climates are hard on people and by extension they’re hard on brands. However, while it might sound counterintuitive, brands who spend and advertise during a downturn will actually emerge in a better place in 2023 and beyond.
A recent study out of the US about “recession-proofing” your brand found 60% of brands that increased their media investment during the last recession saw great return on investments, while brands that increased paid advertising also saw a 17% rise in incremental sales. On the other hand, brands who cut ad spending risk losing 15% of their revenue during a recession. What does this data show? It shows the best way to get through an economic downturn and prosper on the other side is to think long term by investing in your brand and your relationships with customers.
In this article, we’re discussing why it pays to advertise during tough economic times and how you can do it successfully to come out on top.
Thriving in a downturn 101: How to successfully do it
Advertising and marketing during tough economic periods is essential, but you still need to be smart about it. Here’s how to do it.
Take advantage of reduced competition
Because most brands see marketing as a cost-centre, you’ll find your competitors slow down on the advertising and marketing front in tough economic times. Reducing their marketing and advertising spend means consumers will see and hear about their brand less, which is your time to shine, baby! With everyone scaling back, now you can fill in the space they left behind. With the right targeted campaigns using the right people (like social media influencers and skilled content creators, for example) you can become the go-to brand in your industry, and perhaps even win customers over from other brands.
Partner with the right influencers
Influencer marketing is a compelling channel during a downturn, not only because it has a great return on investment, but also offers an incredible source of organic engagement and insights. Plus, creator-generated content can also be repurposed and used across other channels such as out-of-home and digital – so it’s more bang for your buck. Influencer marketing is a powerful way to leverage and get assets at scale at a much more budget-friendly price point than traditional channels. Not to mention consumers trust influencers and content creators, and in stressful times, consumers turn to people they trust for recommendations on products worth their money.
Consumer emotions are key
Whether it’s stressful times or happy times – tapping into consumer emotions is vital. At the crux of it, successful advertising and marketing comes down to whether you can make a consumer feel something – move them to purchase from you. In an economic downturn, it’s safe to say times are more stressful than happy, so if you can successfully show consumers you’re on their side, that you’re there for them, that you empathise with what they’re experiencing, this will help build a trusting relationship that will not only last through a recession but beyond it too.
Strengthen relationships with your customers
In a downturn, building and maintaining strong relationships with your customer-based is super important. Finding new customers can also be a goal, but one of the best marketing resources for a brand always has and always will be loyal customers. The key in this scenario is to adapt to changing customer needs and finding opportunities to build trust in tough times. Whether this is creating valuable, no-strings-attached content for customers, offering added-value products or services or investing in technology to provide a better customer experience – keeping current customers happy is key.
Don’t slash prices
In a downturn it can be tempting to do everything you can to get consumers to buy, including slashing your prices. While a considered discount-strategy can certainly help generate some revenue, it needs to be done carefully. If you begin to drop your prices too low for too long, consumers may start to re-think the value of your brand and start seeing you as a budget company – and unless that’s your goal, this isn’t the route you want to take. It’s wise to pay attention to what competitors are doing, but never undersell your products or services for a short-term fix as it’ll greatly affect your long-term gains.
Recessions don’t last forever
The big thing to remember is that recessions don’t last forever. In fact, modern recessions typically only last 10 months. So, if you cut your marketing spending now, it will only result in a small number of savings, putting you at a disadvantage to bounce-back once the downturn has ended. The solution isn’t to slash your budget but rather invest in channels and strategies that perform well.
One of the best marketing strategies in a downturn is partnering with the right people to help propel your brand forward now and into the future. At theright.fit, we work with thousands of influences and content creators who are trustworthy, reliable and can help deliver significant results for your brand across exposure, follower increase and real-world purchases.