Marketing in a Recession

Consumers become very frugal in a recession. Their morning $4 lattes become a luxury. Their outdated MP3 players become a little more manageable. They decide to put off those home improvements they’ve been planning for months. It’s harder for them to go from “I want that product” to “I need that product” when deep down inside, they know they don’t really need it to survive. More important than that flat screen TV is food for their family, gas for their car, and their electricity bill.

 

But there is a bright side for marketers. Harsh times can create opportunities in the marketplace as some competitors may cut back on marketing spending. The key is to focus on customer relationships, targeting marketing messages to the right people at the right time. When a consumer who is familiar with your brand, or has been a customer before, is in the decision making process, that’s when you can get the biggest bang for your buck.

 

So what is the best way to do this?

I’ve seen some great efforts, some not so great efforts, and some absolutely awful efforts. I’d have to say the worst approach would be blanketing consumers with an untargeted message that doesn’t appeal to people’s basic needs, which include family, health, and sustainability.

 

For instance, a friend of mine recently received a direct mail piece from Chase Bank offering funds for tuition and school-related expenses for the 2008-2009 academic year. Not only is my friend well out of school and already repaying her student loans, but she has never done business with Chase in the past. The fact that Chase reached out to her with an annoyingly untargeted message damages any potential relationship they could ever have. Also, it’s a waste of money on the company’s part.

 

Look to email marketing.

Due to its relatively low cost, marketing online can be powerful during economic hard times. Email is great for this. It can be more cost efficient than direct marketing and print advertising, and marketers can personalize content to reflect what is important to each customer based on their past behavior. Not only does this forge a great customer relationship, but it becomes a one-to-one relationship.

 

Another friend of mine uses all Aveda skincare and hair care, and is a member of their Pure Privilege loyalty program. She recently received a birthday email from Aveda with the incentive of earning double points on all purchases. Her decision to buy on impulse was greatly influenced by the company’s targeted and customized birthday message, and became a win for both consumer and marketer.

 

Go social in a recession.

Another best practice is the use of social media marketing. Not only is this a targeted and cost effective method of striking a dialogue with consumers, it also has tremendous staying power in a recession as the nature of social media is unaffected by rising and falling costs. One company that has done a great job with this is Proctor and Gamble. The return on investment for the social networking community BeingGirl.com, which features brands like Tampax and Always and allows teenage girls to relate with each other on the issues affecting girls their age, is four times that of its TV ads for the same dollar amount. Talk about being smart with money.

 

Think outside the box.

In a recession, marketers are presented with the opportunity to be creative, courageous, and impactful. Since many businesses cut back, this is the opportunity to stand out in a less cluttered marketing environment. The marketing survivors are the ones that look to innovation to reach their consumers, and take the time to re-evaluate customer relationships and expand on them.

 

Check out North Star Marketing’s weekly Compass email over the next few weeks for 60 second tips on marketing in a recession. We’ll be discussing other ways to help your business through the down economy, including marketing to your best customers, prospects, and referral sources.

 

Have any other examples of good, and bad, marketing in a recession? I’d love to hear them! Drop me a line at april@fortheloveofmarketing.com.