A recession is often paired with a slump in sales and cost-cutting, but brands and retailers looking to reduce spending shouldn’t necessary cut their marketing budgets, according to research published by the Harvard Business Review (HBR).
“Companies that have bounced back most strongly from previous recessions usually did not cut their marketing spend, and in many cases actually increased it. But they did change what they were spending their marketing budget on and when to reflect the new context in which they operated.”
“During recessions, when most firms are cutting back on their brand advertising, a firm’s share of voice increases if it can maintain or increase its advertising budget.”
The key to advertising during recessions is adjusting the tone of content to reflect the zeitgeist and consumer sentiment. The challenges faced during the current pandemic calls on brands to show compassion and solidarity with consumers.
According to HBR, successful brand advertising during a recession not only injects humour and emotion, but also answers for consumers the question: How can we help?”
“Marketing in a recession will never be easy, largely because it often involves going against instincts and standard operating norms. Customers’ behaviour undergoes profound changes – reflecting changes in their circumstances and needs, which may even be traumatic. In this environment you must accompany your customers on their new, different journey, shifting your message and even re-engineering your value proposition. This is a time not to stop spending money but a time to change how you spend it. It is also an opportunity, because firms who are willing to be what customers need in a recession get to keep many of the new customers they get — and cement the loyalty of those they already had.”
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