In times of economic uncertainty, customers and businesses tend to rationalize their spending as they anticipate future developments.
In the same way that a consumer would choose to focus their spending on goods and services that they consider essential, a company will generally allocate a larger share of their spending to the production of their core products, and/or the operation of their core services. However, a company's marketing investments should not be considered as a non-essential expenses and no longer supporting them could accentuate the damage caused by a recession.This is why.
1. Improve your brand image
During a recession, it is essential to remember that loyal customers are the main source of sustainable cash flow and organic growth. Marketing is not optional, it is an essential expense to generate revenue from these key customers, and others. As such, strong brands are the ones that best survive periods of economic instability because they have maintained familiarity and recognition with their customers.
2. Take advantage
As much as any recession is cyclical, more prosperous times always come back eventually, and that's where you’ll have a card to play. Investing in your digital marketing during a recession is not only no less important, but could be even more valuable as it gives you a clear advantage over the competition. Investing in your marketing at a time when others tend to do less is offering your company the recognition of customers. This can help you reach potential customers and expand your customer base. According to a 2003 study, 35% of customers buy products they would normally buy elsewhere during a recession as a result of an advertising campaign (Andrew Crosthwaite 2003).
3. After the recession comes the boom
One of the key points for an investment in marketing solutions to be effective is to maintain consistency in your investments. This not only helps to maintain a loyal customer base and brand image, as we saw earlier, but also to benefits from the double positive effect of a recession when it ends.For example, 70% of companies that increased revenues or profits during the 2001 recession maintained those gains during the subsequent economic recovery, while less than 30% of companies that lost ground regained their position (Baveja, Postma and Pritzl 2002). Continuing to advertise during periods of economic uncertainty is essential to avoid destabilizing the entire effort that was previously made.
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