When the economy is gloomy, keep calm and keep spending.
We’re not sure why CMO’s have panic attacks during a down economy. But we’re sure they have their reasons that escapes us. We’ve seen it with billion dollar global brands and small mom and pop brands. It never fails. Throughout our careers, we’ve all gotten “the call” from a client, “Help! The economy is tanking! The world is ending! Stop the presses! Cancel the media buy! Kill all production! Stop all advertising! Ahhh!”
The interesting thing is that most agencies panic along with them, thinking they are being the ever-supportive partner, “Yes, Bob! We’ll get right on it! I feel your pain! Ahhh!” But let me tell you, those agencies are fooling you. Because they know very well when the economy recovers, they are going to hammer you with costs to get you back to where you were. And they’d be right to.
Why? Because you went full dark. And any good agency would tell you to never go full dark. Going full dark means your audience will and/or already has highly likely moved on and found another brand that will continue to meet their needs and challenges when the economy has soured. And when the economy does right itself and things turn peachy again, that audience is gone. Forever. And all the money you spent reaching them is lost. Forever. Try telling that CMO’s to your CEO. You’ll be needing a job ASAP PDQ.
General Patton was a firm believer in, “Never fighting for the same ground twice.” Do not go dark during a down economy! You will have to spend twice or maybe three times as much as before to try and get your audience back (trust me, they won’t come back).
Why? You let them down. You broke your brand’s promise and they’ve moved on. So that leaves you with your only other option of trying to attract a new audience who doesn’t know your brand, or may know it, but are unlikely to switch over. You’ve now got to fight for the same ground again. Ouch! It will take more money for new thinking, planning, strategy, creative, and media, because your new audience will be different from your last audience. It will be years before you regain your losses and get back into the war.
Meanwhile, the real issue is your competition, whom if they were smart, kept spending and protecting their share of the audience. They’re now way, way ahead of you. During the down economy they probably maintained a flat line of revenue or grew a small amount. Now, with a healthy economy, and no competition since you went dark, they will see much larger revenue gains from an audience spending again (now with a higher disposable income) whom appreci- ated the support their brand has shown them. Better still, they’ll share with other people about how great your brand was to them. Yup, that means more revenue and more loyal customers. Bet you wish you were that CMO.
So a down economy threatens, what do you do? We counsel clients to maintain their spending. We know what you’re thinking, “Hey agency guys, you just want to keep continuing making money so you don’t suffer.” Believe me, we suffer. But either way, you’re going to have to spend money. And like we said above, if you keep your spending up, you’ll actually save money in the long run. But, also, if you keep your spending up over time, you’ll spend less as your brand awareness grows and you maintain increased brand loyalty. That’s a fact.
Here are a few ways you might adjust your advertising/marketing plan during a down economy (depending on client and industry).
- Evaluate your media strategy and planning to alter media buy – find out where the audience has moved to receive information. Perhaps you lower the TV media spend and increase digital.
- Emphasize certain products or services that may help the audience during a down economy.
- Adjust your messaging to keep your audience engaged.
- Increase customer service protocol and emphasize customer support more than ever. Be there for your audience. They need you now!
- Create new products or services to meet the new needs of your audience.
- Since competition may go dark, ramp up efforts to steal their audience looking for solutions.
- If applicable, create value-added promotions. We discourage coupons and discounts. It will train your audience to only buy during those offers if given the chance, and you’ll lose revenue.
It’s no secret that after reading this insight, our agency places emphasis on our client’s audiences. In good times and bad times, no matter what the economy or life is doing, it’s all about planning and knowing your audience’s needs, wants and desires. Remember why you’re in business, your purpose, your promise and let the audience guide you. This thinking will save you money and perhaps make you even more.
Don’t panic during a down economy. Get your thinking caps on, get aggressive, plan, keep your spend up, and serve your audience!