Like most people, I have a visceral reaction to the word recession and can map my career against the recessions I’ve lived through. While no two recessions are the same, it doesn’t mean we can’t learn from what we lived through as marketers. After all, they say that history doesn’t repeat itself, but it does rhyme. So, here are seven lessons from the last couple of recessions we can keep in mind today:
The Lipstick Effect – while consumers will be understandably putting off (although interestingly enough not cancelling) big ticket purchases, they will be looking for everyday affordable indulgences. A more modern take on this could be the latte effect but either way consumers are looking for comfort and reassurance when they spend their dollars. Marketers may not be able to take advantage of this depending on theor category or position, but its important to be aware of how consumers are thinking and acting.
Fix Up Not Upgrade – even though we’re in the throws of fast fashion, its worth remembering that in 2008 both cobblers and tailors saw a big increase in business as consumers decided to fix what they had rather than buy new to save a few dollars.
Quality Over Quantity – faced with increasing supply chain costs, CPGs may be considering changing the ingredients in their products to save money but consumers are notoriously fickle about changing flavours. Far better to shrink the size of the product and have complaints around shrinkflation (up to a point) than to skimp on the quality and have consumers abandon your product altogether.
Anchors Not Mooring – rather than mooring your brand in its current category, think about how you can anchor yourself against unconventional comparisons or alternatives. A set of home candles and oils ($) compares favourably against a day at the spa ($$$). A $30 download fee for a film is great value compared to going out to the movies on a date night and spending a couple of hundred dollars on baby-sitters, dinner, pop-corn, drinks and whatever else you can think of.
Value, Value, Value – all the quality, all the anchoring, all the lipstick effecting will be for naught if your product can’t demonstrate its value to the end consumer. Now, marketers may believe they have conclusively proved their value but the landscape has changed and now products need to win the day every day – there’s no room for coasting on the hard-won laurels of yesteryear
Be You, Just More of It – when people come under great stress, their personalities can change but when faced with seemingly insurmountable stress, their personalities change back to their original, just more. It should be the same for brands. Marketers have worked hard to figure out what their USP is; how they stand apart from their competitors so, if you have an established brand which consumers know and understand, your job is simple. You should double down on who your brand is, how it speaks and how it acts in order to cement itself in the minds of your consumers. Work on your differentiation – it will help your value proposition, your comparison points and other decisions you need to make
Increase Share of Voice – this is the hard one. When the world is going to hell in a hand basket, how can you responsibly maintain your marketing spend, let alone increase it? All the “science” and best practice says to do it but the fabric of you being says don’t. And you don’t have to maintain or increase marketing spend to grow within a recession – you just need to ensure you don’t cut as much as your competition. You just (just!) need to stay a little ahead of the other guys – this doesn’t need to be through paid media…you just need to be more visible, have more mental availability with your consumer and there are many relatively easy ways to do that with digital content and distribution.
There you have it. Seven ways to think about marketing during a recession using behavioural economics and hard won lessons from someone who’s seen it before – after all, experience matters.