By Patrick Ingraham
Inflation in the United States is at its highest level in 40 years. The cost of transportation and groceries is rising, the stock market is tumbling, labor and supply chain issues wreak havoc on businesses of every size. These are all signs that point to an impending recession, say economists. Despite this dim outlook, past economic downturns have shown that businesses can weather the recessive storm and even come out ahead if they continue to invest in marketing and communications programs.
Many businesses look to tighten their belts in a recession but historical trends show that it may be the last thing a savvy business leader should do in this situation. More often than not, reducing or eliminating marketing programs will quickly cause a company to lose its competitive edge. This is because reduced market visibility results in lost loyalty and trust from customers and stakeholders. In hard times, brands that continued to spend or even increased their marketing and communications budgets exceeded sales expectations and perhaps more importantly, earned loyal customers who stood by the brand in future ups and downs.
Del Monte Foods is a great example. During the 2008 recession, instead of reducing its marketing staff, Del Monte hired a Chief Marketing Officer, increased its ad budget, and launched several consumer-focused campaigns that leveraged the value their canned goods have in stretching customers’ food dollars. Del Monte’s persistence led to a profit of nearly $60 million in Q1 2009 after a loss of more than $10 million the previous quarter.
Successful businesses communicate comfort and familiarity with their customers during times of hardship. A Tuck School of Business at Dartmouth study examining business trends from 1921 to 2005 showed brands that continued to maintain a significant market presence resulted in those companies faring well during a downturn.
Companies must be willing to strategically revisit their marketing approach during a recession. Because consumers will likely watch their wallets more closely, brands that convey authenticity and genuine care for the community are more likely to gain consumers’ trust. Effective marketers initiate campaigns that help local schools, afterschool programs, charities, small businesses, or nonprofit organizations.
It may seem counterintuitive, but companies that launch products in the midst of an economic downturn often have better long-term survival chances and stronger revenues. A Science Institute study on the automotive industry from 1945 to 2008 showed fewer new competing products. On top of that, R&D and marketing departments often hone in on their best developments during a recession.
Positioning company executives and leadership teams as industry experts is also effective because it leads to the perception that they are go-to, solutions-focused industry thought leaders during the down period.
Here’s what the cleantech industry can learn from the way consumer brands have handled marketing during a recession:
- Treat a recession as an opportunity to take a proactive approach to strengthen your organization and its talent pool
- Monitor your competitors closely and strategize your communications and public relations campaigns accordingly
- Get creative with your marketing, advertising, and communications efforts so you don’t break the bank.
- Utilize your local community and position your leadership as an industry thought leader and advocate for the industry
These approaches to marketing will keep investors, employees, and customers happy and strengthen your company.
Mercom Capital Group can help you develop a recession-proof marketing plan. Contact us today at firstname.lastname@example.org and let us know how we can assist you.