June 26, 2020
The lessons in the business marketplace are clear and consistent: companies emerge strong when they continue smart marketing and advertising during crises, recession and downturns. Firms that sustain marketing during economic challenges are historically rewarded with sales growth, increased market share and even market dominance.
Our own firm, Next Level Performance, learned many lessons as we successfully guided clients and our own programs and service offerings to counter the Great Recession of 2008-2009. In the crucible and pressure of crisis, we learned to listen to the market, pivot, and create new services at price points appropriate to conditions. Some of our most successful platforms emerged during that period, such as the simplicity of Great Rewards® award codes, eGift Cards (rewards that arrive immediately via email), and Great Escapes® to bring travel rewards to a larger audience, with the lure of individual choice.
The Basic Benefits of Continuous Marketing
What are some immediate, positive results from ‘leaning in’ to an economic downturn?
Reduced noise from the competition – some firms are always going to be conservative and pull back on marketing and ad budgets, step into the visibility gap and be present!
Marketing prevents “reputation rot.” Solid marketing efforts take a positive posture speaking volumes to media, investors, industry followers about strength and determination, encouraging additional spending of their own, and good brand positioning.
Marketing during downturns maintains mindshare. Cessation of marketing cedes share of voice. Silence equates to invisibility in the zero-sum fight for share of mind and for a position on a solutions-purchasing consideration set. Those organizations who continue efforts will fill any vacuum left, and it may be difficult, if not impossible, to win it back after the downturn.
Historic Examples of the Positive Results of Marketing During Financial Crises
What are some historical examples or success stories about companies that continue to spend on marketing during poor economic conditions? Past victories can be very enlightening and inspiring, as a guide. Witness the kinds of success that can be achieved by taking what appears to be a risk and turning it into a clear advantage. Here are business anecdotes of U.S. corporations that won big by ‘leaning in’ to a downturn:
HISTORIC ECONOMIC DOWNTURN or CRISIS, MARKETING ACTIVITY, AND RESULTS
1929-1932 Great Depression
Kellogg doubled ad spend; Post cut back.
Kellogg won +30% share and became breakfast cereal category leader
1973-1975 Energy Crisis
Toyota’s gas-sipping Corolla continued promotion during this period’s 17-month recession
Toyota surpassed even VW as #1 import car seller
1990-1991 Recession
In the Fast Food category, McDonalds reduced ad budget; others continued with similar spends
Pizza Hut market share grew +61%; Taco Bell gained +40%; McDonalds declined 28%
2008-2009 Great Recession
Amazon innovated to achieve a per-unit price reduction on books, by releasing their new digital book reader product, Kindle
Amazon’s 2009 ebooks sales exceeded those of print books
Smart Strategies
The smart application of strategies that suit current conditions can do more than merely economize to stem short-term losses. The right path ahead can lead to growth for a company that exercises market awareness.
Marketing campaigns can be scaled to increase efficiency with improved targeting. More marketing mileage is to be made by concentrating budget and effort on the effective segments, products and offers. it is not a question of, ‘should I continue to market,’ so much as ‘how shall I best continue to market.’
Simply continuing to promote the same old message is not enough. Voice and tone are vital to maintain brand affinity. Show empathy regarding conditions. Give concrete evidence that the company is on the customer’s side. Include Loyalty Programs to reward both high-purchasing customers and support the “long-tail” — people who purchase small orders frequently.
According to Harvard Business Review, market research is essential to select marketing tactics to employ. “Track how customers are reassessing priorities, reallocating budgets, switching among brands and product categories, and redefining value.” This is doubly true of commoditized channel markets. Buyers may not resume old purchasing patterns, even when the pressure is removed.
Discount king Sam Walton (of WalMart fame) put it succinctly. When asked about recession, he said, “I thought about it, and decided not to participate.”
New Examples of Marketing Fortitude During Downturn
Recession can be a time to explore what the future holds.
New, innovative solutions that have been waiting in the wings can surge to market dominance when conditions are ripe. Consider Zoom or Teams or Webex and the need for video-enhanced conference calls (not to be confused with live-streamed Virtual Meetings and Events).
Coronavirus, and the resulting social distancing, are attempts to ‘flatten the curve’ of new infections growth. This drove a huge spike in remote working as a result. 63 percent of U.S. employees worked from home in April (Gallup).
Work from home conditions created sudden demand to replace recurring face-to-face meetings. The need to be understood required sharing of documents and screens. Zoom’s service had gained a low-key reputation for ease and reliability. Once the platform overcame capacity and security issues, the “Zoom boom“ resulted in quadrupled corporate customers, a tripled market valuation and tripled annual revenues.
A similar surge occurred in our Group Incentive Travel business. For Next Level Performance, we continue our tradition of using innovation to turn challenge into opportunity with the introduction of Virtual Meetings.
Business travel, indeed all travel, has been shaken to its core by COVID-19-related restrictions and lockdowns. Motivational trips for target audiences of sales reps, leadership, customers, agents and referrers may never be the same. But, out of the crucible of crisis, come the seeds of lasting change. Next Level continues our efforts to increase the memorability and ‘wow factor’ of events by crafting virtual experiences.
Next Level has rolled out Virtual Meetings & Events as a product offering. It is perfect right now as it enables companies to continue staging motivation events for sales, engagement of global employees, strategic retreats for executives, and alignment of referrers and partners. The only limit to how memorable a virtual event can be, is one’s imagination. Budgets can be more efficient, and virtual events and meetings are proving just as effective as analog trips. Hands-on activities can be used to engage participants. Even top–line celebrity entertainment can be procured at lower cost. Reduced waste, minimal carbon footprint, and time savings for participants are added benefits.
Be Alert to Emerging Niche Opportunities
Basic business needs must be filled. The need to gather an audience to inform, persuade and motivate continue. The magic lies in how this can best be accomplished to maximum effect. That is why we’re deploying new methods to deliver the right experience and content that will engage and inspire the audience and stimulate the desired behavior.
Continuing to promote innovation during an economic downturn can challenge resources. It may run counter to conventional wisdom. But history proves again and again that fortune favors the brave.
Handling rapid growth is another problem, but that’s a “happy problem” that many businesspeople would love to solve, instead of having to react to the alternative.
RESOURCES LINKS
https://hbr.org/2009/04/how-to-market-in-a-downturn-2
https://crowdfavorite.com/why-successful-companies-keep-investing-in-ongoing-marketing/