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Marketing in hard times: why investing in brand building is key

bigstock-Stressed-Businessman-Sit-At-De-458890699All British brands at the moment: “Even though things are hard right now and everybody’s struggling and nobody’s got any money, don’t forget to spend money with us.”

Stolen from @kelseyellison on TikTok, it sums up perfectly what marketing in an economic downturn/recession can feel like.

Often, brands attempt to come across as sensitive to their customers’ lack of disposable income, only for the audience to see straight through it. In defence of advertisers, it’s not an easy balance to strike – and the answer isn’t always to bend entirely to customers’ wishes.

Invest into willingness to pay

The current crunch in household budgets is challenging consumers’ loyalty to their regular purchases. Kantar’s latest reports show that shoppers are maintaining their weekly budgets but making ends meet by switching to lower priced alternatives.

This is forcing brands to think about the prospect of lowering their prices. But, be careful with price sensitivity – it’s easier to go down than up. Too many promotions will devalue the product and could mean that consumers will only purchase when the product is on offer.

Instead, you should think about doubling down on your efforts to improve ‘willingness to pay’. When everything else is being down-traded for cheaper items, you want your item to be the one thing the consumer keeps in the basket.

It may mean that some brands (wanting to protect price premium) will need to shift their message. Now might be the right time to position that small item as “an affordable luxury” – a subtle tweak that recognises the current climate while positioning the product as irreplaceable.

bigstock-Hands-Holding-Cellphone-Shoppi-458891717Take a long-term view of the brand

There are some brands such as Apple, Fever-Tree, and MAC, who rarely discount their products, even in times of a recession. These brands often market themselves as the go-to brand in their industry, giving consumers no other choice but to pay the premium.

In its latest summer campaign, Fever-Tree emphasised the superior quality of its product with the tagline, “If ¾ of your drink is the mixer, mix with the best”. Unveiling the campaign, Saskia Meyer, UK marketing director, said: “We want to remind drinkers to continue to seek the highest quality tonic, which matters just as much as their gin. Cheers to a T&G (tonic & gin).”

That isn’t to say that all brands are in a position to take a similar stance on price. It’s very much horses for courses. But it’s true that brand building can be devalued by promotion-hungry retail plans.

Once brands are doing 90% of their volume on deal, the concept of base price is eroded for consumers. When brands over promote, retailers rarely suffer but margins are shot for the brand owners which can destroy their long-term viability.

So, don’t just think about getting your brand through the cost-of-living crisis – take a longer view, imagining where you’ll sit in the market once the dust has settled.

Bet on brand recall

If you’re committed to standing firm on price – or even if you’re not, to be honest – focus on your existing customers, who are familiar with your offering and looking for reasons to stay loyal.

Customer retention is not only necessary in an economic downturn, crucially, it’s better value for money.

Attracting a new customer can cost as much as 15 times more than retaining an existing customer. Another reason to push keeping hold of your existing customers? They spend two-thirds more than new customers. The probability of selling to an existing customer is 60-70% more likely, as opposed to 5-20% when selling to a potential customer.

So, put most of your chips on brand recall. Resist the pressure to switch advertising spend from brand solely to activation – it makes very little sense to do so, even in the short term. Remember, customers in many cases are not reluctant to buy, they are unable to buy.

While customers are looking for ways to save money right now, they also want to ensure their money is well spent. Simple brand campaigns that demonstrate brand values which align consumers’ and show empathy can aid brand recall in a way similar to price reductions.

Branded content is the best way to get your brand name out there and aid brand recall. The longer-form nature of the content not only affords you the time and space to underline your value, it’s delivered in an environment (publication) that’s valued by your audience.

When designing out your recession-friendly marketing plan, we can help with campaigns designed to deliver. Contact us today to see how we create and distribute inspiring, on-brand content that performs.