SwampFox

Top of Mind - Lead Us Not Into Recession

Submitted by: Mike Zeller on Jun 18, 2008 at 7:10 pm Tagged with: Importance of marketing during a recession Source: Andrew Bennett, Global Chief Strategy Officer - EuroRSCG

Now that a recession is all but official (except for calling the thing a recession, of course), we can expect that quite a few companies will do what companies always do when things get tough: Hunker down and wait for the hard times to blow over. That's their choice, of course.

Just don't make it yours.

Economists have no shortage of metaphors for a recession; in my view, it should be seen as a lull—a temporary slow period that represents an opportunity for brands to gear up and make their presences felt in meaningful ways. Study after study has shown that brands with the guts to increase marketing spend during a downturn will emerge as winners, not only when the good times return, but even during the recession itself.

The trick, of course, is how to do it right, which is where a specific and highly critical consumer demographic comes into play. Like any good marketer, I've coined my own term for them—"prosumers"—but it's who they are that's important; you can call them what you wish. They are, simply put, today's most proactive, engaged and demanding shoppers. While they should be the focus of a brand's marketing efforts at any time, they're an especially important target now. Why? Because these consumers possess the savvy to make smart choices while persuading others to follow them.

Think of these leading-edge consumers as overbearing mothers-in-law. They demand respect, want to be catered to and they rarely forgive a slight. Now that a recession is upon us, this hyper-vigilant strain of buyer has, if anything, become even more demanding than before. But what are they demanding?

One big thing is confidence. Recession or no, this is an era in which consumers are looking for corporations to take the lead. They admire businesses that have a clear sense of self, and they want to be connected with brands that have a purpose beyond profit. Think: Whole Foods. Apple. Target. A recent study by my firm found that a whopping 86% of domestic consumers believe it's important that companies stand for something other than profitability. And better than seven in 10 believe businesses bear as much responsibility as governments for driving positive social change. That's an enormous burden to place on businesses, but it's one consumers expect their brand partners to handle with assurance.

Empathy is another critical attribute a brand should have in full view right now. Actually, make that genuine empathy: 80% of U.S. consumers consider it their responsibility to censure unethical companies by avoiding their products. During an economic downturn especially, consumers will be turned off by empty expressions of sympathy even as they reward brands that seem genuinely concerned with playing a role in socioeconomic course correction. Consider Wal-Mart's price rollback of 10-30% on essentials as recessionary fears took hold this past January; its 18-month interest-free loans. Quite simply, the company's strategy fit the times.

Finally, while economists and pundits wager how long we'll be mired in this economic quagmire, brands need to talk straight, and keep their doors open to listen. Today, the average Joe or Jane can reach a CEO by e-mail, which is how it should be. In an age of blogs, message boards and Webinars, savvier brand execs understand the importance of engaging directly with consumers. Our research revealed that 80% of American consumers felt it was imperative for businesses to maintain a dialogue with them. And a majority demand that corporations be completely open and transparent in their business dealings and communication.

So leave the hunkering down to other brands. Challenging economic times (OK, a recession) have created a more proactive, more demanding consumer, one that the equally proactive brand can win, right now, as a customer.