By Niki Grant, Head of Search as featured in The Media Leader.
In times like these, it’s not so much about what a brand is marketing, but more how a brand is marketing.
Once again, we find ourselves in a ‘cost of living crisis’; 9% inflation (expected to rise to 13%) and significant energy price hikes are causing increased tension on already strained purse strings following Brexit and broader global issues such as the pandemic, Russian/Ukraine war, and their accompanying challenges.
From start-ups to blue chips across the land, the question is being asked, ‘How can we save money?’, and marketing budgets are often the first to fall foul of the resulting cuts. I’d like to propose an alternative question with loftier, longer-term aspirations: ‘How can we come out of this stronger?’.
The less-than-ideal-and-could-become-catastrophic economical condition is no reason to cease communicating with your customers or prospects. In fact, a survey commissioned by Reach showed nearly 60% of consumers were demanding support from brands; a stark contrast to the assumption that brands should conscientiously or financially object to marketing during such a time.
At times like these, it’s not so much about what a brand is marketing, but more how a brand is marketing, and this nuance could mean the difference between riding the crisis wave and drowning beneath it.
Communicate with and support your customer base
During times of economic difficulty, consumers will be reviewing existing frequent purchases, subscriptions, and preferences in order to identify any fat that can be trimmed. Brands with little consumer impact beyond their product are at higher risk of being culled, whereas brands with a broader value exchange offering are much more likely to survive the cuts that households are being forced to make.
These value exchanges could include charitable or eco-friendly implications (E.g. buying eco-friendly products or those where a proportion of the proceeds are donated to charity), content offerings (recipe cards for low-cost meals, tips to make products last longer), and loyalty programs (cashback, points collection, discounts).
Whilst consumers may be strapped for cash at the moment, this won’t always be the case, and you want to ensure your brand is still in the running when cashflow improves. ‘Out of sight, out of mind’ will limit your brand’s potential to recover along with the economy if you’ve effectively withdrawn from the market during this time.
Budget approval for such mid-economic crisis marketing may seem like a hard sell, so I asked Ben Foster, managing partner at The Kite Factory how marketing teams could approach the conversion:
“We are heading into an inevitable recession; it’s just a matter of how bad and for how long. During tough times, Financial Directors tighten their grip — and rightly so — because they must control costs and cashflow to ensure the business remains in good health to ride out the storm and survive. During this survival mindset, marketing spend is easy to cut with no incurred costs of investment reduction.
“The key is to ensure all marketing activity is measurable, and the KPIs measured can be proven to have an indisputable (if not linear) impact on the bottom line. If as a marketeer, you can say to your Financial Director, “Give me £1m and I can turn it into £1.1m or more”, it becomes less of a budget or investment, and becomes more like a self-funding model that should be protected. Easier said than done, I know!”
Be strategic in the product lines you’re choosing to use in your marketing
Whilst the economic crisis impacts consumers differently depending on their financial position, peripheral awareness of the situation can be enough to prompt even higher-income households to review their potential purchases. Now more than ever, consumers will be looking to make wise purchase choices, for example:
Longevity of items
What do Le Creuset cookware, Stanley Tools, and Tweezerman all have in common? These brands all offer lifetime guarantees on their products, suggesting that whilst at the higher-cost end of the market, these purchases should be prudent as opposed to indulgent.
Items which unlock cost savings in the long run are likely to thrive given the economic foreshadowing of a late 2023 economic recovery. A £4 takeaway coffee purchased 4 days a week, 50 weeks of the year comes in at an annual cost of £800. A business selling home coffee machines below the £100 mark can offer consumers the opportunity to save hundreds of pounds a year, even if the initial outlay seems like a ‘nice to have’.
Low cost product lines
Brands offering products with a range of price points are more likely to retain consumers through the economic downturn, even if the product choice shifts. By highlighting or signposting lower-cost items, brands can retain consumers (and their trust) even if at a lower margin for now.
Don’t forget the middle of the funnel
When money is tight, it can be tempting for brands to focus on the bottom of the funnel, routing marketing budgets into direct response ‘buy it now!’ messaging.
During tough economical times, consumers are likely to dwell much longer on non-vital purchases; carrying out a higher than usual amount of research, and maybe choosing to ‘sleep on it’ rather than buying on impulse.
Ensure your site is content-rich, extolling the virtues of various products or services, where possible linking back to the elements above of longevity, investment, or lower cost lines.
Niki Grant is search director at The Kite Factory. Check out her previous instalments of Performance Planning, a guide for marketers and media planners to handle performance media planning and budget optimisation and her other columns for The Media Leader.