The importance of marketing in tough economic times.
Will Australia enter a recession?
If one thing is for certain, it is that with rising interest rates and
stagnant or decreasing savings, consumers have the unpleasant feeling that their disposable
incomes are quickly diminishing.
And what the market thinks is what matters, so learn about the importance of marketing in tough economic times.
Is Australia in recession?
Cutting marketing costs, a shortsighted mistake
Despite enticing marketing, consumer confidence ultimately influences purchasing decisions, with
consumer beliefs outweighing flashy campaigns, shaping economic outlook and spending habits.
In 2023, concerns about the country’s financial state surge, reflected in search queries like “is
Australia in recession” and “cost of living”.
In times of uncertainty, households become cautious, altering spending habits and favoring essential
purchases over indulgences; postponable expenses will be planned for later and treats might
become less frequent. And, in an absolute nightmare for all B2C brands, brand loyalty wavers as
consumers sometimes consider opting for cheaper alternatives.
In response to these market signals, companies often cut costs and postpone investments, too often
making the marketing and communication expenditures their first targets – a shortsighted mistake.
Studies on the rise and fall of companies through financial and economic crises since the 70s have
found patterns in business strategies that have caused the success or failure of businesses. While
cost-cutting is a necessary evil during these times, companies that have maintained their marketing
efforts, emphasised customer experience and adapted their offering, ultimately positioned
themselves for future success.
So, we’re going to share with you our ideas on how to trim your costs in a clever way without jeopardising the success of tomorrow.
Reassess your offering
Start by taking a deep dive into your products and services; how likely are they to be impacted by
the crisis? Which ones have the strongest chance of thriving in this market and which ones should be abandoned for now? Is your core target market strongly hit by the rising cost of living or is it more sheltered than the average population?
Focusing on products or services that have the highest likelihood of resilience and on your core
audience will allow you to concentrate your marketing bucks on them to achieve the best cost-efficiency possible. Other products or services and secondary target markets might have to be tabled until more prosperous times.
Gaining in visibility and market share
As some of your competitors reduce their marketing and advertising efforts, what used to be noisy
markets suddenly become much quieter. This creates opportunities for your business to gain market
share and attract more prospects similar to your existing customers which diversifies your client
base. With fewer active brands, your own advertising costs will ultimately decrease too, providing
more value on your investment. Explore new channels and ad types, reach out to new prospects and
secure yourself the lion’s share to invest in your future growth.
Some digital channels you can test to achieve this are the ones that are designed to yield great reach and awareness at a low cost, such as Google display ads, YouTube ads (if you have video content available), or campaigns on any social platforms that suits your business. Capitalise on competitors reducing their digital marketing efforts, for example by running Google search ads for users looking for their brand names and positioning yourself as an alternative, potentially gaining new customers. You can read more about these different digital channels here.
In the world of PR, companies who continue to invest in an ‘always on’ media relations strategy will
thrive as they have the opportunity to capitalise on a quieter news cycle and speak louder to target
markets which will influencer consumer behaviour.
Branding and core values
Maintaining brand integrity is pivotal amid challenges. Resist the urge to dilute your core values to attract temporary customers to ensure you don’t alienate your loyal ones. Even if the temptation is strong to focus solely on the next day when things get tough, it’s crucial to continue to invest in the long term. If you don’t, you risk losing your loyal customer base by trying to momentarily acquire new customers who won’t serve you long term once there is an up-tick in the market again. Furthermore, you would be running the risk of ruffling some feathers with your competitors, whose markets and positionings you will have entered. Despite limited funds, stabilising your brand and emphasising unique selling points is wise. Learn more about the different ways to support your branding here.
Building new creative assets that go back-to-basics by truly reflecting your brand identity and its elements that people recognise and recall is usually a good idea. These assets, spanning from your website to your marketing collaterals, digital campaigns and social media platforms enhance brand recognition. Balancing adaptability with brand stability ensures sustained customer loyalty and market relevance.
Focus on your customers
While market forces and competitors are beyond your control, maintaining a strong connection with
loyal customers is within your grasp. If you have built and maintained your first-party database over
the years, then utilise this to create a unique dialogue with your core audience, acknowledging their
challenges and expressing gratitude for their support through these tough times. Ensure your
communication adds value, aligns with your brand values and most importantly, is genuine.
Direct channels such as email and SMS marketing, when tailored for VIP customers, can show them
how important they are to you. If you cannot afford offers, simply share meaningful updates about
your company, but always keeping in mind that you have to offer something valuable and not simply
talk about what you want to say. Other ways to care for your clients include improving your website
UX and overall customer experience from the first touch point with your business all the way
through to the after care. Authenticity and value-driven communication form the foundation of
lasting customer relationships, empowering your brand amidst market uncertainties.
Plan for the future
Prepare an implementation plan for post-recovery to outpace your competitors. Embrace innovation, introduce new products or services, messages (but still aligned to your core brand values), campaigns, and brand ambassadors that align with your core values.
By planning for it during the quiet period, you will be the first one ready to implement it when the time is right. By engaging your team in the process and encouraging to envision a bright future, you can boost staff retention and productivity. Companies that have been able to strengthen the bond with their teams during hardships have seen evident signs of increased staff loyalty and advocacy, which allows for a higher quality of work from the existing team and is a fantastic leverage to attracting new talents.
Despite budget constraints, prioritise marketing; it’s vital for survival. Explore cost-effective strategies and leverage your team’s collective creativity.
Ten heads work better than one! If in need of marketing ideas, collaborate with our Sabio team for an obligation-free catch-up or introductory consultation. Stay proactive to ensure your business not only survives, but thrives in the evolving market landscape.
Connect with our Digital Director, Sophie Viallard, via [email protected], to find out how our digital experts can support you.