A Recession is an Opportunity Not to be Missed
By Tom Dougherty
Marketers all over the country are in a constant reactionary mode in light of the current state of the economy. Negative retail sales numbers are reported and marketers react by cutting prices. Negative earnings prompt marketers, specifically their bosses, cut marketing budgets and head count. It is a constant cat and mouse game that is a recipe for failure.
Contrary to what many marketers believe, there is more opportunity in the current economy than if it was healthier. Opportunity exists in nearly all categories, but not for the reactionary or status quo. Opportunity is out there for companies with guts. Those willing to take a stand, contrary to the status quo and reach for something more.
While we may be in the midst of the “Great Recession,” the Great Depression was far worse. And using history as a teacher, there were some companies, rather than hide and wait for it to be over, hoping to survive, who took the opportunity and capitalized on it.
Miracle Whip, a cheaper version of mayonnaise, was launched in the Great Depression. In fact, Kraft spent quite a bit of money developing the manufacturing process for the product, launched it in 1933. Six months later, it was the best selling “dressing.” Rice Krispies was also launched by Post during the Great Depression, when all of Post’s competitors were scaling back. (Read a detailed market study of the breakfast market here)
Fast forward 80 years and there are new companies that are showing guts. Apple’s brand epitomizes this. Apple released the iPad in the face of criticisms that there was no place for the device because tablet computers have never been widely accepted and it is a down economy. Now nearly a month later, Apple has basically sold out of the iPad, selling so many in the US that the launch of the iPad in Europe was postponed.
There are a number of examples of brands and companies that were started in an economic downturn. Each company or brand had a single characteristic in common: Guts.
It Takes Guts
In “bad economy branding” make no mistake, recklessness is not the approach. Now is not the time to simply throw money away. However, now is the time to take a critical look at your business and your competitors, and look for ways to capitalize on the situation. It is a pretty safe bet that, in most cases, your competitors are going to stay in place and simply react to changes instead of initiating them. They are going to continue to do what they have always done, and ultimately have less to show for it.
This is your branding opportunity
In most categories, marketing tends to be imitative. The majority of players in a category will all act, look, and speak the same – usually molded after the market leader. Look at how similar auto insurance, banking, automobile and telecommunications marketing has become. Within each category, it’s all the same: Sterile with nearly the exact same messaging.
What’s worse is that the messaging is most often simple descriptions of what any product in that category should provide. Insurance is all about saving money, telecommunications is all about the speed and size of the network, and banks are about friendly people and financial strength. From a consumer perspective, are these ideas strong enough to make target audiences switch from what they are currently doing?
What takes guts is taking the aggressive posture of deciding not to do what the category has always done and do something different. This does not mean changing from a bank to flower shop. It means more deeply understanding your customers and, more importantly, those customers who choose one of your competitors.
Know Thy Enemy
It’s not enough to understand your existing customers. They have already chosen you. In this economy, spending money to better understand your existing customers will do nothing to move the needle and grow your market share. Market share growth comes at the expense of your competitors (in many cases, your competitive set is a lot bigger than you think) and the company that understands their competitor’s customers best will win and be successful regardless of the state of the economy. Even in a bad economy.
Then the guts come in again. Once you have a good understanding of your competitors’ customers, then and only then can you align your brand or organization with them. Their beliefs are what drive their purchasing decisions and it is around these beliefs that successful brands are built.
Product efficacy only goes so far and, realistically, most products perform to a level that satisfies existing customers. What is lacking is an emotional connection that serves as a calling card of the product, a beacon that tells your competitor’s customers that your brand is a reflection of them.
Guts is markedly lacking in most organizations today. Many organizations believe that if they could just get people to “understand” how great their products are then they would switch. These organizations say they want to grow market share but in reality most only want to do so if they can continue to do, act, and say what they have always done. The problem is that it takes guts to actually change what you do and changing what you do, how you act, and what you say based on what your target audience believes is the only way to grow share, especially in a down economy because the recession is an opportunity not to be missed.