When the economy takes a nosedive, it's tempting to cut back on marketing. But experts agree that brands that underinvestment in branding during a recession eventually struggle to recover from it. In fact, companies that increase marketing spending during recessions see twice the market share growth of those that cut back. Here are a few tips from THE REACH. for making your brand stronger in a recession.
Double down on your brand promotion
Tough times do not mean that people stop spending. Of course, they become more selective but their desire to buy new stuff does not wear off. Just take a look at the latest McKinsey report that clearly indicates that over 60% of high income Gen Z and millennials are still ready for splurging even during the current market.
As a result, your task here is to persuade them that your product is what they need. To this end, marketing is essential. Take McDonald's as an example. In 2008, when the global financial crisis was in full swing, the fast food giant used it as an opportunity to push aside its competitors and grab a bigger slice of the market pie. How? Simple. The company hired professional marketers to come up with new products and took advantage of cheaper advertising rates due to its competitors' decision to minimize their expenses. As a result, the company gained a massive sales boost and earned an advantage that no other brand can contest to this day.
Introduce proper positioning
In a recession, companies need to adapt their marketing strategies to target consumers in a way that is both relevant and appealing. This means that textbook methods of market segmentation may not work. Instead, you should consider how different people react to the current economy and pinpoint their pains and needs Here are some specific consumer groups you can outline during a recession and how you can reach them:
1 — Frugal shoppers
Emphasize the value and affordability of your products or services, and offer discounts and promotions.
2 — Budget-conscious consumers
Provide cost-effective solutions or alternatives, and highlight the quality and functionality of your products at a lower price point.
3 — Spenders
Offer exclusive and high-end products or experiences, and utilize personalized marketing strategies to create a sense of exclusivity and privilege.
By understanding the different motivations of these consumer groups, companies can develop more effective marketing strategies.
Add a touch of personalization
In times of economic downturn, brands have a wonderful opportunity to harness the power of customer loyalty programs to their advantage. These programs not only serve as a vital tool for retaining existing customers, but they also have the potential to attract new ones. McKinsey’s report on top-performing loyalty programs revealed that 64% of members of these programs were likely to purchase products more frequently, while 50% recommended their favorite brands to others.
By implementing well-designed loyalty programs, brands can significantly increase customers' willingness to pay while creating a strong barrier for them to consider switching to a competitor.
Furthermore, these programs can act as a great incentive for potential customers to give your brand a try. Customizing the program according to each individual customer's preferences and providing interactive and rewarding experiences will undoubtedly foster greater loyalty.
For instance, Sephora's Beauty Insider Program operates on a fantastic point system where every dollar spent equals one point. It also appeals to different demographics with three tiers: Insider (free to join), VIB, and Rouge, allowing everyone to unlock an array of fabulous perks.
Conclusion
Recession is not the end of the world. In fact, it can be an exciting time to unleash your creativity and propel your business forward. By thinking outside the box and adapting to the changing market, you can emerge from a recession stronger than ever before.
If you need help navigating this challenging landscape, THE REACH. agency is here for you. We specialize in helping businesses thrive during recessions by developing innovative marketing solutions.
When the economy takes a nosedive, it's tempting to cut back on marketing. But experts agree that brands that underinvestment in branding during a recession eventually struggle to recover from it. In fact, companies that increase marketing spending during recessions see twice the market share growth of those that cut back. Here are a few tips from THE REACH. for making your brand stronger in a recession.
Double down on your brand promotion
Tough times do not mean that people stop spending. Of course, they become more selective but their desire to buy new stuff does not wear off. Just take a look at the latest McKinsey report that clearly indicates that over 60% of high income Gen Z and millennials are still ready for splurging even during the current market.
As a result, your task here is to persuade them that your product is what they need. To this end, marketing is essential. Take McDonald's as an example. In 2008, when the global financial crisis was in full swing, the fast food giant used it as an opportunity to push aside its competitors and grab a bigger slice of the market pie. How? Simple. The company hired professional marketers to come up with new products and took advantage of cheaper advertising rates due to its competitors' decision to minimize their expenses. As a result, the company gained a massive sales boost and earned an advantage that no other brand can contest to this day.
Introduce proper positioning
In a recession, companies need to adapt their marketing strategies to target consumers in a way that is both relevant and appealing. This means that textbook methods of market segmentation may not work. Instead, you should consider how different people react to the current economy and pinpoint their pains and needs Here are some specific consumer groups you can outline during a recession and how you can reach them:
1 — Frugal shoppers
Emphasize the value and affordability of your products or services, and offer discounts and promotions.
2 — Budget-conscious consumers
Provide cost-effective solutions or alternatives, and highlight the quality and functionality of your products at a lower price point.
3 — Spenders
Offer exclusive and high-end products or experiences, and utilize personalized marketing strategies to create a sense of exclusivity and privilege.
By understanding the different motivations of these consumer groups, companies can develop more effective marketing strategies.
Add a touch of personalization
In times of economic downturn, brands have a wonderful opportunity to harness the power of customer loyalty programs to their advantage. These programs not only serve as a vital tool for retaining existing customers, but they also have the potential to attract new ones. McKinsey’s report on top-performing loyalty programs revealed that 64% of members of these programs were likely to purchase products more frequently, while 50% recommended their favorite brands to others.
By implementing well-designed loyalty programs, brands can significantly increase customers' willingness to pay while creating a strong barrier for them to consider switching to a competitor.
Furthermore, these programs can act as a great incentive for potential customers to give your brand a try. Customizing the program according to each individual customer's preferences and providing interactive and rewarding experiences will undoubtedly foster greater loyalty.
For instance, Sephora's Beauty Insider Program operates on a fantastic point system where every dollar spent equals one point. It also appeals to different demographics with three tiers: Insider (free to join), VIB, and Rouge, allowing everyone to unlock an array of fabulous perks.
Conclusion
Recession is not the end of the world. In fact, it can be an exciting time to unleash your creativity and propel your business forward. By thinking outside the box and adapting to the changing market, you can emerge from a recession stronger than ever before.
If you need help navigating this challenging landscape, THE REACH. agency is here for you. We specialize in helping businesses thrive during recessions by developing innovative marketing solutions.
Get in touch today to discuss how we can help your brand stay ahead
