March 24, 2020
2. Focus on Core Products/Brands
While continuing to advertise during a recession is important, it is just as important to focus that advertising on the right brands and products. This should be the core brands of a company, those that are most likely to survive the recession. This is a best practice recommended by Millward Brown (now Kantar), a global expert on advertising effectiveness, and is supported by additional research.
By focusing on only the core products, companies avoid spreading themselves too thin with the limited resources available. Companies should review their brand portfolio and make determinations as to which products have a positive image, the potential for increased sales, and other factors that would make them more likely to be successful during an economic downturn. Since consumers often already have strong associations with successful brands, focusing there can increase the likelihood of success during a difficult economy.
Lowering prices should not be part of the strategy unless it is already part of the company’s positioning. When premium brands lower prices to weather a storm, it is very difficult to regain the premium price when the economy improves. However, this is one area that may not mirror past downturns. Given the extreme market volatility we are currently seeing, this may change – especially as it applies to B2B.
One way to improve the effectiveness of an advertising budget is to increase creativity. During a recession, more than ever, it is important that messages grab attention and are memorable. Most if not all brands are now thinking about how to evolve their narrative, messaging and tone to be more sensitive and to not appear opportunistic. Looking at how core products and services can help people weather this period points the way.
The focus on core should also be extended to include core customers. Since it is five times more expensive to acquire new customers as it is to retain existing ones, during lean times it makes sense to focus on existing customers. By giving them an extraordinary experience, they are more likely to spread the word about the brand, which may result in new customers as well.
A good example comes from a report Bain published analyzing companies’ recession strategies. The report outlines how Samsung divested and streamlined their non-core brands and released the first Galaxy phone in 2009. As part of this strategy, they also rebranded themselves as an innovative company. As a result of this focus on their core business, Samsung recently was ranked number 6 in brand value on Interbrand’s global list — a significant jump from its rank of 21 at the beginning of the last recession in 2008.
3. Establish your brand as an authentic, trusted partner for the long-term
During uncertainty, people are looking for answers as to what’s ahead from anyone who can craft a careful, tuned-in message – one that isn’t focused on selling. Times will inevitably look different after we get through the state of pandemic, and it’s hard to say what that will look like. But what we do know is that there will be an after, and brands that appropriately respond will enjoy deeper connections and brand love.
Today’s audiences believe that brands need to take a stand–and if they aren’t helping, they’re part of the problem. On the flipside, brands that are contributing are already getting a significant amount of positive press, such as LVMH, who is producing free hand sanitizer for healthcare workers in France. By orienting efforts around a strong purpose, brands feel authentic and build deeper relationships with their audiences for the long-run.
Additionally, brands that pivot in ways that seamlessly fit into the world’s new way of living may find themselves an integral part of society beyond the crisis. For example, brands that are offering free, live workouts on Instagram (e.g., Rumble) or video conferencing tools (e.g., Zoom) may see ongoing loyalty as the world shifts towards new habits developed during an era of social distancing.
Bloomberg’s coronavirus coverage is available to all readers in front of the subscriber paywall.