More, more, more: Seizing opportunities under threat of recession
The Covid crisis saw companies slash or even entirely cut their marketing budgets out of panic. Now, as uncertain times are upon us again, Wunderkind's Australian GM Jamie Hoey explains there are other options.
During the uncertainty, and I’m about to say it – unprecedented times – of the Covid outbreak, we saw many companies across various sectors rein in their marketing and advertising spend, with some pausing activity all together.
While some marketing results may seem intangible, the effect of ‘switching off’ marketing is counterintuitive to the goal – to maintain customers and revenue in a time of economic uncertainty.
Picture: Karolina Grabowska
Yet, we’re already back in ‘unprecedented times’. Consumers are spending less as the rising cost of living, inflation and interest rates are all hitting discretionary income.
As consumer spending drops, business spending tends to reflect the drop in activity.
Under the threat of recession, there are both challenges and opportunities that will determine brands’ success moving forward, and eventually out of the economic downturn.
Marketing through uncertainty requires a disciplined, data-driven resolve to maximise the most important outcomes. Whether during a recession or under the looming threat of one, we need to learn from past mistakes.
The key to success lies in doing more with what you have, investing more in truly understanding your customers and making more informed decisions backed by the data.
Doing more with what you have
First and foremost, it’s important to not be market reactive or reduce budgets.
Remember, economic uncertainty is cyclical, and a recession is not necessarily imminent, nor guaranteed. Slashing budgets could put you on the back foot when the market inevitably turns.
Customer retention is what keeps businesses afloat during uncertain times and engaging consistently ensures you stay top of mind when they decide to spend again.
Targeting existing or repeat customers is going to be much easier and far more cost-effective than acquiring new ones.
Just as brand loyalty can take years to nurture, letting your marketing slip risks jeopardising your visibility and memorability as customers gravitate to new and more active brands.
Plus, maintaining your brand visibility is going to provide additional opportunities to capitalise on your competitors’ reduced marketing efforts.
Investing more in truly understanding your customers
Amid recent uncertainty and shifting priorities, ensuring your focus lies in understanding and exceeding your customers’ expectations is key to success.
Consumers are looking to prioritise where their hard-earned cash is spent. Therefore, it’s crucial to have a holistic understanding of your customers to capture a portion of that wallet share.
And I don’t just mean how they’re spending.
For example, marketing during the pandemic (consumers generally had more spare income and more free time) is very different compared to now (where consumers are cutting back spend).
Consider whether your current strategies and channels are effective for, and sensitive to, the current environment. What are their preferences? How do they like to engage with brands? What drives them? The next step is to put this into action.
This means ensuring all content is reflective of what your customers are experiencing and positioning your brand appropriately.
Marketers have more tech and more channels than they’ve ever had before, leading to an abundance of data. So even if budgets become strained or cut, there are more opportunities out there for marketers to harness the opportunities at a more cost-effective rate.
Making more informed decisions, backed by data
Consumers expect and demand a highly personalised and curated experience when online shopping.
And while we may have access to a wealth of information, the real value lies in effectively utilising the data to drive meaningful insights and impactful actions.
While we have traditionally relied on third-party data to achieve this, leveraging first-party data to craft more personalised customer experiences is required to engage today’s increasingly cautious shoppers.
First-party data helps marketers understand their customers at a granular level, helping to tailor messaging, offers, and experiences to meet their customer’s unique needs and preferences and deliver these experiences through the channels they’re most likely to engage with.
This is why it’s crucial to build owned channels, leverage first-party data and allow customer identity solutions to help fuel personalisation strategies by empowering your marketing teams to recognise customers and understand their wants and needs at every touchpoint.
Owned channels are the centre of gravity of your brand – now more than ever. With budgets strained, marketers cannot afford to ignore the efficiency of websites, email, text messaging, and mobile apps to keep customers engaged.
After all, ‘more’ doesn’t mean your budget needs to increase during a time of uncertainty, it simply means doing more with what’s at your disposal, while concentrating investment on the most effective channels.
Focusing on doing more with what you have is going to capitalise on your market share, build loyalty, and prime your customers to be ready to re-engage in the inevitable market upturn.
Change is constant, but we can learn to navigate it and seize the opportunities found within.
Jamie Hoey is the Australian general manager of Wunderkind.
