Branding In a Down Economy

Well, it's official. In case anyone was wondering, the government has declared that we are now in a recession. Who knew?

In light of that cheery announcement, I have some good news for people willing to invest in their business when everyone else is holding back out of fear. I ran across this great article on branding and marketing in a down economy and wanted to share it with you... I'd love to hear your thoughts if you have seen these principals in action.

How to Market Effectively in a Down Economy
By Henry Russell Bruce

Marketing in a Down Economy. Marketers begin to fear for their budgets when whispers of a recession arise. Since World War II, the United States has weathered 11 recessions. Veteran marketers have experienced economic slowdowns before and they know how to deal with them. Marketing professionals need to look at both the long and short term solutions and opportunities to marketing in a down economy.

Be aggressive. Marketing budgets will be slashed. Advertising Age states that in the most recent recession, the first three quarters of 2001, the advertising industry suffered its deepest budget cutbacks in 75 years. It is important to know that if an organization continues to proactively market in this environment, it can gain leverage. Research conducted at Pennsylvania State and University of Texas at Austin reveals that organizations entering a recession with a pre-established strategic emphasis on marketing can come out of a recession ahead of the game. The marketers who perceive the recession as an opportunity can capitalize on it quickly. A recession creates a unique environment that makes aggressive marketing even more successful. There will be less “clutter” in the short term for marketers to compete with. Less proactive organizations will slash their budgets and the number of marketing efforts will decrease. Consumers will be easier to reach. Also, media outlets will be more willing to make deals, such as decreased rates, increased placements, better placements and even category exclusivity.

A down economy is a great opportunity for brand strengthening. Proactive marketing sends a message to customers that the organization is confident in its staying power during hard times. The credibility that public relations efforts offer is perfectly suited to slowing economic times. Public relations is a less expensive marketing tool that also maintains relationships and keeps the organization’s name in front of its audiences. This sort of marketing may also act as a buffer against declining sales and increase market share by stealing customers away from those with slashed budgets.

Stay ahead of the game. The “invisible hand” will reassert economic balance in the long term. As the economy upswings, organizations will start actively marketing again. But the organizations that continued to proactively market during economic downturns will have a competitive advantage over those that are playing catch-up.

“Advertisers that continue to advertise during slow times will come out better and faster when the economy picks up,” said Wall Snyder, President and CEO of American Advertising Federation during his visit to Cedar Rapids, Iowa, in January 2008. This approach is tried and true. Marketing News reported that in 2001, companies that maintained or increased their marketing efforts managed to boost their market share and outperform those organizations with decreased marketing by almost 250 percent. Organizations that aggressively marketed increased their market share by 1.5 percent, and the organizations that managed to survive the recession and decreased their marketing budget only gained 0.2 percent.

Go into a slowing economy prepared with a plan tailored to the new environment. The researchers at Pennsylvania State and University of Texas at Austin found that an organization’s interpretation of a recession as an opportunity was a predictor of success. Also be prepared to set, defend and actively reach ROI goals. Organizations will weigh every penny against results. BtoB Magazine recommends increasing the use of Internet tools because of the inherent measurement qualities for ROI.

Listen to your customers. During an economic slowdown, organizations cannot afford to lose current customers. It is much more expensive to gain than to retain, which is why it is so critical to focus on current customers. Turn current customers into loyal brand advocates by focusing on their needs. Use marketing tools to assert confidence in the brand in a way that will resonate with the customer. Ad Age recommends, “Understand the recession and its impact on your consumer, and act quickly.”

Consumer habits change as the economy takes a nosedive. For example, they will spend less on personal items and discretionary purchases. But they are willing to spend more on brands that they value and trust. Use limited dollars more effectively to develop a stronger brand relationship with customers. Jupiter Research noted that most marketers still struggle to create messages that appeal to customers. Monitor customer activity to learn what resonates. Customer-focused research can provide insights into customer behavior, as well as potential opportunities.

Focus on interactive marketing tools. In the short and long term, social and interactive marketing tools deliver numerous benefits. Interactive marketing is less expensive and often more effective than traditional marketing outlets for reaching target audiences. Use these tools as a personal touch-point to strengthen brand confidence.

Forrester Research found that even if a recession occurs in the next six months, 26 percent of interactive marketers plan to increase their interactive marketing investments and 46 percent will maintain them at current levels. Also, more than 40 percent will increase their use of social networking tools such as blogs,
user-generated content and e-mails. Research also showed that using these tools can boost revenues nearly four times. If an organization is not utilizing these tools, then now is the time to learn. Marketing professionals are entering the age of Web 2.0 and consumer habits are changing.

Interactive marketing tools also allow measurable results that show ROI, the first line of defense against budget cutbacks. The tracking and analysis capabilities also reveal data about consumers that can be used to target and communicate with them more effectively. Ad Age reports that most marketing budgets are not yet being reduced. Maintain your budget by understanding the impact of a slowing economy and applying adaptive marketing methods. And stay positive, because in the end it will pay off to be a proactive marketer.

Brand Navigation