In 2010, we were in the midst of the Great Recession and there were so many things similar to today’s economic climate. Large-scale layoffs, furloughs, the unemployment rate was sitting at 10 percent and marketing budgets were slashed!
Accountants love cutting “non-essential” or “big ticket” expenditures. For some reason, that includes marketing, communications and advertising. To me, this logic is like watching a fire go out and refusing to put more wood on the stack because it costs too much to keep it going.
Even the greatest of companies, those that you didn’t think would need bailouts and would survive a turn in the economy, took the same approach of a slash-and-burn account to marketing.
Of course, during the Great Recession, there were some indicators which hinted at a slowdown. With the recent worldwide Coronavirus pandemic, none of us ever could have imagined 20 to 25 percent unemployment and more than 115,000 deaths in the U.S.
During the Great Depression, things were as bleak as they are right now. In fact, many are saying it will be worse than the Great Depression. Unemployment was rampant and several of the same industries were hit hard. According to a New Yorker story that ran during the Great Recession, Kellogg won during the Great Depression while almost everyone failed. An excerpt from the story read:
In the late 1920s, two companies, Kellogg and Post, dominated the market for packaged cereal. It was still a relatively new market— ready-to-eat cereal had been around for decades, but Americans didn’t see it as a real alternative to oatmeal or cream of wheat until the ‘20s. So, when the Depression hit, no one knew what would happen to consumer demand. Post did the predictable thing. It reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the 30s.) By 1933, even as the economy cratered, Kellogg’s profits had risen almost 30% and it had become what it remains today, the industry’s dominant player.
This too will end and when it does, you and your clients want to be on top! There are three ways to focus on marketing strategy:
- Concentrate on marketing share
- Turn down, don’t turn off
- Create demand through pricing and payment terms
Concentrate on marketing share
As your client’s competitors go out of business or stop marketing altogether, you have an opportunity to capitalize on this opportunity to help them realize gains in market share. Just like you, they may have suffered a loss in customers or a massive decline in revenue and that may have caused lower customer satisfaction.
This may also make the customers who are left a prime focus in which to offer new opportunities. Encourage them to communicate and market as aggressively as possible, focus on their great service and product. Make sure your counsel isn’t deaf to those in need or are hurting during this time. Raise your client’s brand awareness and craft messaging focused on those that can afford the product or service.
Most importantly, ensure that existing customers have no reason to go elsewhere and the client’s new customers have no reason to go back to their competitors when this is all said and done.
Turn down, don’t turn off
No doubt about it, today’s market is ripe for a savvy buyer. Make sure your client is out there to be reached. It may not be the same level of marketing you were doing 90 days ago, but it needs to be something. Use smart strategies to increase your frequency, target past consumer audience segments and learn from those current customers why they are still with your client.
Create demand through pricing and payment terms
Addressing the barrier of expense is the No. 1 objection during these times. Encourage your client to consider flexible payments from consumers. Offer advice with a service now, pay more later strategy and finally, remember, payment will come slow. Bolster your client’s expectations to ensure they have enough income to bridge the gap.
Create Your Plan Now
We can all agree, these are very difficult times. It is difficult to see the end of the tunnel. However, when that brilliant beam appears, even if it is still many miles away, be prepared!
No kidding, use this time to start planning now. Determine which of these strategies you are going to implement for your own agency as well as your clients. They can be used singularly, or in combination. Either way, make sure when this is all over, you and your clients are a winner like Kellogg rather than a 150 runner-up like Post.
Tony Vann is the President of Vann & Associates, an award-winning, public relations and marketing agency in Oklahoma. Proud to be the Oklahoma and Wichita, Kansas PRCG Affiliate, he became a member in 2017, previously co-chaired the membership committee and now chairs the 2021 Annual Conference Committee.