What Brands Must Do Now

We’re well into 2023 and what a rocky start to the year it’s been. As many as 7 in 10 * have faced cuts to their marketing budgets in 2023 and inflation continues to be double digits in the UK. So how do you continue to show up to your customers during times of uncertainty?

During an economic downturn, it's natural to tighten your belt and look for ways to cut costs. However, it's important to remember that marketing is a core driver of business, and cutting back will have long-term consequences. Many studies have shown that brands that continue to spend during times of recession recover faster and stronger than those that cut back.

Here are my three top tips for thriving during an economic downturn.

Do Not Cut Back on Brand Spend.

First and foremost, it's important to maintain brand spend. Customers need consistency, stability, and trust even more during times of uncertainty.

Understanding the long-lasting impression brand marketing makes is especially important given the 95-5 rule, which shows that 95% of your potential buyers aren’t ready to buy today. This 95% are “out-market” today but will be “in-market” sometime in the future. 

The 95-5 rule isn’t just a theory; it's based on Linkedin’s How B2B Brands Grow research with the Ehrenberg-Bass Institute which showed that:-

-       75% of companies buy computers once every 4 years

-       80% of companies change banking services once every 5 years

-       90% of consumers buy new cars every 10 years

The examples above are big ticket items but it highlights that most of the time, most category buyers are not “in-market” to buy right now but will come into the market to buy within the next 12-24 months.

The key is to focus on connecting with your target audience on an emotional level to create long-lasting impressions to ensure you are front of mind when they are ready to buy.

Get Closer To Your Customers 

Next, make sure you know your customers inside and out. During times of instability, consumers will be more cautious with their spending, so it's important to understand what motivates them and what pain points they're experiencing. Using market research can help you better understand your customers and create messages that resonate with them.

What’s more, it will inform new product and service ideas to keep you ahead of the competition.

Get Creative

Finally, don't be afraid to get creative. When budgets are tight, it can be tempting to stick to the same old same old. However, now is the time to think outside the box and come up with new and innovative ways to reach your target audience. Consider partnering with other businesses to reach new audiences and share the cost, use social media influencers, and create interactive content that will engage your audience. This could be as simple as a survey or a competition- but engage the audience to participate in some way to create long-term memories.

Some of the most unexpected and creative partnerships have paid dividends for brands, a personal favourite of mine was the epic Gucci & Northface partnership or the recent Tiffany X Nike collab that created a stir amongst the marketing community. Yes, these brands have deep pockets, but the strategy behind both partnerships is to resonate with a different audience and grow revenues from otherwise hard-to-reach audiences. The same strategies can be used regardless of budget, size, or sector.

Do The Opposite of What Feels Easy

An economic downturn is a challenging time for business and it's easy to lose confidence and stop spending on your brand, but the key to success is to do the exact opposite.

Maintain your brand spend, get closer to your customers, and get creative to ensure you set yourself up for long-term success.

 * source : salesmanago, CMO survey 2022