Adjusting to Recession Headwinds
The near term outlook for the economy is bleak in the US, the UK, and Canada. The recession headwinds are strong and there is much debate as to how long it will last and how deep it will be. Yet while we are entering a painful period for many, we can take solace from the knowledge that this is not the first recession to hit and there is much to be learned from previous downturns that can help mitigate damage on this one. The time to move is now.
Brands need to take steps urgently:
1. Rethink the customer experience
Many households will be thinking of resetting their financial priorities, spending significantly less in some categories. They are looking for help to cope with a tough economy and will appreciate brands that show them how to stretch their strained budgets.
Premium brands will need to anchor their communications on messages that reinforce the values consumers will appreciate even in a down economy. Bargain brands will have a larger audience ready to save some money as long as the rest of the experience meets their needs and standards
Look to research tools that measure the whole customer experience. Paid advertising experiences often only account for 30% of the ways people encounter brands. And Owned channel experiences, like websites, apps and call centers normally have a bigger impact on brand metrics. With the rush to gather first party data and a changing brand/customer relationship, marketers see Owned channels increasing in importance. Paid, Earned, Owned, Shared and Retail are all important and play different roles. If you have data gaps for your brands and competitors, you are missing the big picture.
Our own Real Time Experience tracking can help, especially when combined with our sales modeling.
2. Revisit and refresh your creative strategy
Who are you trying to persuade, and how? And how does that change if those consumers are now facing a tough economy?
When COVID hit, many brands jumped on a message that was important….that we are all in this together…but not distinctive. The herd approach became so pervasive as to generate parody...not where any brand leader wants to be.
Rather, use this time to interrogate the distinctive values of your brand and how you can make people’s lives easier in a way meaningful to them and aligned with your unique values. How can your brand be even more relevant in these times? Show empathy and build trust; find ways to be relevant to the challenges each of your customers face.
Let us help by connecting research, attribution modeling, and our Clear Performance Narrative to recession-proof your business.
3. Reconsider where and how you spend your budgets.
How media spend is allocated becomes a habit. It's easy to do what you've always done, and pressure suppliers into doing it for less. Yet, when there's less money it's time to think, or rethink basic principles. Don't be afraid to challenge sacred cows; every penny spent has to drive a result, regardless of some notional cost-per-thousand or reach number.
Question whether there is a more effective way of using communication channels to drive effect. Is every channel used, used as well as it can be? What's the optimum way to schedule spend over time? Are all forms of communication working together in concert to deliver to a common goal? Can paid spend be reduced in favour of owned media impacts?
When the going gets tough it's time to focus. Be sure everyone understands the brand's true objectives, and then measure all activities against those objectives. Selling more, maximising profit is not necessarily the same as buying more clicks, or reducing cpm. Focus on what's important to the brand's health and deliver to those.
4. Sharpen your analytics for attribution and optimization
One of the most effective steps you can take to fight the effects of this recession is to sharpen your tools for measuring and optimizing marketing effect. (NOT efficiencies; not the bulk buying of impressions at ever cheaper prices, but rather a focus on what lifts the business, at prices aligned with the value created).
In our work, combining predictive modeling and customized optimization, we typically see improvements in marcom impacts on the order of 10-35%. That might be enough to offset....or better....the impacts of this recession.
Be sure you have in place reliable, validated analytics that:
quantify the lift in sales due to marketing communication and the resulting ROI;
show how this varies by region;
drill down to the lift of individual channels...TV, print, OOH, all forms of digital, etc....and their ROI
show how you can better combine and target channels and how much sales lift you can expect when you do.
don’t be distracted by intermediate measures of success (clicks, reach, engagement, etc.) that have even less relevance in a tough economy than they did in a growth one.
When recession winds blow, we are reminded that factors out of our control can challenge the best laid plans. But as the saying goes, while we cannot control the winds, we can certainly adjust our sails.
Let's talk about how we can best help your team tack against this headwind; contact us today