5 Ways to Recession-proof Your Marketing
Brand loyalty has eroded due to the recession that’s tightened consumer budgets and heightened cost consciousness.
In 2011, roughly four out of ten shoppers buy the “brand they want most” in terms of consumer goods (namely things bought in grocery stores and drugstore), an erosion of over 10% based on research by comScore.
With tighter budgets, customers concentrate on purchasing must-have products and services. With fewer impulse purchases, need and purchase price override other factors. As a marketer, this has an impact on which products you choose to highlight and how they’re positioned. According to comScore research, one in five shoppers has converted to less expensive brands, often private label. Additionally, shoppers will buy an alternative to their usual brand that’s on sale.
Due to more restricted disposable income, consumers make different product tradeoffs. Depending on the items involved, it may mean using things longer, fixing what they have rather than buying new, or trading down to less expensive substitutes. It’s important to consider how these behaviors impact customers’ view of your merchandise.
Across age groups, except seniors, computer websites are the dominant choice for price comparisons. Other research confirms that consumers actively seek price savings, discounts and coupons via social media. While the mobile results appear relatively low, this may be driven by the fact that many retailers don’t have effective mobiles sites and consumers have been slow to use scanning and other information options. Interestingly, about 10% of respondents don’t compare prices.
5 Ways to recession-proof your marketing
While this comScore research focused on consumer goods, the same challenges exist for all marketers who need to maintain profitability despite increasing production costs. And this needs to be done while positioning your firm for future growth. Here are five ways to position your marketing in this challenging market.
- Monitor the environment, competition, business and social media indicators. Watch for early signs that your market’s changing. Go beyond the top-line metrics and dig into the details to determine what’s driving those sales. For example, top-line sales may remain constant, but the mix may be shifting to lower-priced products having a big impact on profitability.
- Reallocate your marketing budget. After you determine the product lines and promotions that work best in the current environment, adjust your marketing budget accordingly. Find places where you can reduce price points, and be prepared to quickly eliminate or modify marketing plans that no longer work. Where possible, start doing this early in the fiscal year to give you flexibility. Prioritize promotions to complete important initiatives to move the business forward while maintaining sales. Review each initiative’s ROI and profitability implications.
- Assess how your product offering meets your target market’s current needs. Examine your offering to make it attractive for consumers’ current priorities. Understand that, with a dynamic economy, your product offering may attract different types of buyers.
- Change your promotional calendar to focus on customers’ changing needs. Take into account cost-driven motivations. Present your offerings as budget stretchers. This doesn’t mean every promotion must be a sale or savings-driven. Consider how to convince buyers your products are worth the investment in these are tough times.
- Plan for longer decision-making process. When funds are limited, customers wait until the last possible moment to buy. You must be ready to sell when they’re ready to buy. Maintain connections with past and prospective customers, both directly and through alternate means, such as social media.
Remember that a problem for one business can be an opportunity for another. Your job is to figure out how to satisfy customers, regardless of the economy. In tough times, the nimble can survive and position their firm to increase market share when the economy changes.
Do you have any other recommendations to help marketers cope in this dynamic, challenging market?
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