It is common knowledge that there has been lots of talk about prices increasing and an economic recession being on the way. With people looking at tightening their purse strings and pulling back their spend dramatically a slowdown in businesses is inevitable. It is understandable that through fear of a decline in revenue, businesses look at cutting back themselves in various areas, including their ad spend, however is this a good idea?
Should you still advertise during an economic downturn?
The simple answer to this question is yes and here is why. Businesses can use this time to reposition themselves within the market and even introduce a new product or brand category to gain attention and traction when their competitors may themselves have cut back on their marketing efforts. It will come as no great surprise that mindshare is lost with consumers when marketers cut back on their ad spend which could lead to the potential loss of important sales. However if you maintain your presence you could see an increase in your own share of voice and thus sales and revenue. In addition to this, the more present and visible you are during challenging times, the more likely you are to be able to create the image of corporate stability in a time where reassurance is very much needed.
Is it worth changing your marketing approach and if so, what should you do?
All businesses should know their audience and the content put out with your marketing efforts should reflect this but it should also consider the challenges your consumers will be facing during a recession. You need them to know you’re still there and open for business without being inconsiderate and insensitive to these hard times, so treading lightly with your ad messaging and even changing your usual tactics may be something you want to consider.
With more people spending time at home, consumer trends have changed a fair amount over the past few years and will undoubtedly be reshaped once more as we head into another recession. By monitoring consumer spending habits and what your own customers are tilting towards within your business you will be able to gauge a feel for where your focus should lie in the coming months.
Consumers will be looking to spend their money more wisely and are often looking for incentives, if they think they are getting a great deal for something they are more likely to part ways with their cash. Offering short term price incentives which match the current economic climate such as special promotional offers can help boost your sales and even your market share. Once the economy stabilises again, you can bring back your regular pricing or you may even find your offerings went down well enough that you choose to continue rolling them out going forward. For those businesses who choose not to offer any cost incentives, it is definitely worth considering changing your ad message to state your USP’s and show potential customers why they should shop with you over a competitor. You may be the more expensive option but is the quality of your products worth the price? You have nothing to lose by pointing out the brand value.
It is never going to be easy marketing in a recession, mainly as it requires you to go against your natural instincts of pulling back spend and altering your normal operating ways. However, as your customer behaviour changes, it is important your business adjusts too. By accompanying your customers on their new buying journey and recognising it is not a time to stop spending money but merely change the way in which you spend it. By maintaining a steady advertising budget as well as tweaking your offerings and/or messaging and taking the opportunity to reevaluate your customers wants and needs, you can mould your offerings which will encourage any possible new customers to spend as well as keeping the loyalty of those you already have. You can turn the tables and create a positive impact in the long run as well as in the short term by boosting your sales and navigate through the economic downturn successfully.