Recession Brings Opportunities for Marketers

10 Nov 2008

by James Meyers

Well, the elections are over, but little else has changed. The economy continues to bottom out, the stock market continues to drop on trader paranoia and companies continue to run scared. It’s a tough time for CMOs and marketers as they fight internal pressures to cut advertising costs, reduce staff and continue to produce results.

I’ve spent the last week poring over everything I can find about what marketers should do in the midst of an economic recession and the overwhelming sentiment and evidence is that the best marketers are looking at today’s economy as a real opportunity to expand market share versus weak competitors.

Since the end of World War II there have been eleven economic recessions or slowdowns in the United States that have provided plenty of opportunity to study how marketers have reacted and which companies have benefited and which have failed. Most recently, a 2005 study by the Smeal College of Business at Penn State University found that companies who have an ongoing strategic emphasis on the importance of marketing, who have nimble, entrepreneurial-type cultures and who have the resources to take advantage of marketing opportunities during a recession not only fair better during the recession but also come out of the recession quicker and significantly accelerate their growth much faster than their competitors when the economy begins to recover.

It’s not surprising that marketers who are positioned to see opportunities while those around them are cutting back marketing, costs, staffing and quality receive the double benefit of being aggressive at a time when their competition is pulling back. It’s truly an opportunity for the strongest to survive and flourish. World class athletes know that under times of great stress, their ability to focus, summon up resources and perform at a high level will nearly always results in victory against weaker opponents. They sense the weakness in their opponents, their fear, their inability to rise to the occasion and they take advantage of it. Think of Tiger Woods. Does he slack off or lose focus when he’s ahead or in dangerous waters? No, that’s the time when he goes in for the kill.

Advertising Age recently said that “recessions offer unprecedented opportunities to market in an environment of relatively less noise as others around you are cutting back”.

The November 10th issue of Business Week reported that Wal-Mart is enjoying double-digit profit growth while retailers all around them are reporting declines. Some retailers, such as Linens ‘N Things and Circuit City are filing for bankruptcy or closing stores. Clearly, Wal-Mart’s longtime emphasis on low pricing plays well in today’s economic environment. But did you know that Wal-Mart’s Every Day Low Prices slogan started during the last economic slowdown? And it’s not just about low prices, otherwise K-Mart and Sears would be reporting similar results. It’s about value, brand and staying focused in your communications.

After much reading and research, it seems the key to economic success during an economic downturn is maintaining a clear and constant focus on five critical areas: Competition, Brand, Customers, Communications and Staff.

Competition: Audit everything about your competitors. Their products, their website, their pricing, their sales force, everything! It’s critical that you know their every move not only to anticipate their tactics against you but to find their weaknesses that you might be able to exploit during a time when they are already looking over their shoulder. Take advantage of the economic uncertainty and risk to leave your competition far behind just as that world class athlete would.

Build Your Brand: Focus on those things that got you where you are today. Support and build your brand proposition. Reinforce the core values of your brand to make sure that your existing customers don’t see any deterioration in the products or services that they expect. If you have multiple products or services, make sure that you protect and nourish your core brands first particularly during poor economic times. They are your bread and butter. Never reduce quality to cut costs.

Customers: It’s common to avoid your customers during tough times in an attempt to “fly under the radar” of their economic troubles. But that’s exactly the opposite of what you should be doing. Now is the time to be listening to your customers, understanding their needs and fears, offering solutions to help. Be visible, be a partner, be a resource to them. Exceeding their expectations during tough times will pay off now and even more so when the economy improves.

Communications: Cutting back on communications and marketing during tough economic times moves you back into the pack of other companies who are running scared. It’s likely that just not reducing spending will put you ahead of your competitors. But, don’t be foolish, be smart. Adjust your spending to be more targeted, more frequent and more measurable. Economic recessions call for a focus on marketing that minimizes waste, engages customers and results in a return on investment that can be measured. Marketers move away from mass media during tough economic times in favor of more targeted, measurable media such as websites, custom publishing and community-building. Custom media continues to be proven way for companies to solidify their customer relationships, drive engagement and increase revenues.

Staff: Probably one of the most overlooked and neglected areas of focus during tough economic times is your staff. Don’t forget that they have a lot less information than you do, that they are being bombarded by bad news from the media and that they’re concerned or scared for their own jobs and their financial well-being. Now’s the time for increased communication with them that will keep them informed, engaged and with a feeling of purpose and value.

Recessions offer a time for opportunity. When everyone else around you is running for cover because the sky is falling, you have the opportunity to move your brand forward. But it takes focus, courage and commitment to be successful. That’s why small businesses generally do better than big companies during tough times because these are the type that first drove entrepreneurs to be successful. After all, entrepreneurs are used to flying in the face of advertisity, finding success when others predict failure and staying focused every day on achieving their dreams. We all need to exhibit a little more entrepreneurial spirit in these tough times, take risks and stay focused on success rather than failure.

Tags: business opportunities, custom media, custom publishing, entrepreneurs, marketing, Recession, small businesses
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