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At the start of this year, my colleague Simon Kinnear outlined in a LinkedIn post how he saw the world of marketing shaping up in 2023. Among many useful observations and comments, he emphasised the vital importance of communication and marketing activities, even in economically challenging times.
As he pointed out, in every economic downtime, there are always companies whose immediate reaction is to cut their marketing budget, but it is in fact the brands who project an image of stability and consistency who thrive in the long-term – and that means being visible to your customers.
A quick search of the internet will find many articles that emphasise the importance of communications and marketing in a recession. As we wrestled with the economic shocks of the pandemic in 2020, the Harvard Business Review advised Don’t Cut Your Marketing Budget in a Recession. And with the cost-of-living crisis beginning to bite last year, the E-Commerce Times offered this Marketing Advice in a Trouble Economy: Increase Spend or Lose Sales.
There are plenty of examples to be found of ‘best practice’ in this situation. One often quoted is Reckitt Benckiser’s response to the recession following the 2008 financial crash. Instead of reducing spending as their competitors were doing, the company launched a marketing campaign that included increasing advertising by 25%. The result was that Reckitt Benckiser grew revenues by 8% and profits by 14% at a time when rivals were reporting declines.
Effective communication is vital to any marketing activity. In economically straitened times, when there is less business to be won, it is doubly important for a company to make itself noticed as much as possible. Indeed, there may be immediate opportunities to be gained if, for example, a weakened competitor fails, or a new customer enters the market.
It is also imperative to keep talking to your existing customers as well as finding new ones. This is vital in the short-term, since customer needs may be changing as their markets react to the current situation, but equally important as the recession ends. The situation at the start of the upturn could be markedly different from how it was before the downturn. By keeping existing customer relationships going and forging new ones, organisations will be better placed to win orders.
Surviving a recession is not just about getting through these tough times, therefore; it is also about planning ahead, so as to be in the best position when the upturn arrives, as it inevitably will. This means it is important for companies to continue to focus on the outside world to be well placed to take advantage.
It is also useful not to get too focused on the negative media comment that always surrounds economic difficulties. Of course, a shrinking economy is not good news; but if there was a reduction of, say, 4%, it would still mean that we will do 96% of the business that we did last year. Business will still be happening. Downturns can create opportunities for those that are brave enough.
Maintaining effective marketing and communications is a vital part of this. Nielsen McAllister was established in early 1990 just before the UK started to enter a recession. We were fortunate, however, to have clients with the foresight to realise that continuing to ensure an external presence in the media and communicating regularly with their customers and prospects were not only essential to deal with the immediate situation but also central to their ongoing ambitious growth plans. And we’ve been helping clients navigate several more economically challenging times since then.
While the maintaining marketing and communications advice in order to effectively manage an economic downturn remains the same, the media landscape has undoubtedly changed since previous recessions. The growth of the internet and the arrival of the many social media channels mean there are now plenty more opportunities for companies to be seen – and equally, plenty more opportunities for them to be missed if they decide to scale back on their communication activities.
I recall an article from 2008 that compared companies hunkering down in a recession to squirrels storing nuts and preparing to hibernate. Instead, said the author “They should be tossing their acorns out of the tree to generate potential growth.”
For companies in the logistics sector trying to remain competitive, there is greater pressure than ever to deliver effective supply chain PR and communications. In Simon's latest blog, he's explaining how to deliver the right messages.
What I hadn’t prepared for in my new job at Nielsen McAllister, was all the fantastic unspoken ‘extras’ that come with a career in B2b PR, including a whole lot of stepping out of my beloved ‘comfort zone’.