Finding the Positives in an Economic Downturn
If you’re sick of the endless stream of bad news the media has supplied us with lately – this article is for you. We’re here to inform you that yes, businesses can emerge from a downturn stronger than they were before – and there are plenty of studies to prove it.
As explained by Geoff Colvin in The Upside of the Downturn, “even the scariest recession has an upside. The best managers know conventional thinking won't help them win in these tough times. They're taking smart, practical steps that will not only keep them strong, but will also distance them from the pack for years to come.”
It’s an opportunity to outshine your competition.
As sales start to decline, many companies are cutting costs and slashing marketing budgets. This creates a window of opportunity for a brand to take advantage of quieter media channels, less advertisements to compete with, along with lower costs per conversion. That doesn’t require pumping a ton of money into your budget either – work with what you have and get creative with offerings. Because if you continue to communicate with customers through-out the downturn and your competitor doesn't, who is likely to see the most growth when the economy starts to bounce back?
“Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession,” explained in Harvard Business Review, How to Market in a Downturn.
Research shows that companies that continue to advertise during recession periods perform better in the long run. A McGraw-Hill Research study looking at 600 companies from 1980 to 1985 found that those businesses which chose to maintain or raise their level of advertising expenditures during the 1981 and 1982 recession had significantly higher sales after the economy recovered. In fact, those companies that advertised heavily during the recession had sales 256% higher than those that stopped advertising.
It encourages outside-the-box strategies.
COVID-19 is requiring people and companies to think and behave differently. While the effects of the pandemic has it’s challenges, it also encourages out-of-the-box thinking and new opportunities to meet your customers exactly where they are. Consider the ways your brand can connect with socially-distanced consumers who are spending a majority of time at home.
According to a recent study by Global Web Index, 87% of U.S. consumers say they're consuming more content – broadcast TV, online videos, and online TV streaming take the top spots overall for increased media consumption. The study also gathers that online videos could have the greatest staying power after the outbreak ends in the U.S. and among Gen Z and millennials especially. Across all demographics, Facebook is used the most for information about the virus.
Maybe it’s time to shift from outdoor and print advertising to building your digital presence. Or launch your first Youtube video campaign. Or start creating meaningful blog articles that resonate with your audience. If your customers are reducing their spending, it may be a great time to inspire them with a great sales promotion that builds brand loyalty. The opportunities are out there, and if your company is willing to adapt – these times of great need can also serve as powerful opportunities.
In an analysis of the 1990-91 recession, Penton Research Services, Coopers & Lybrand, in conjunction with Business Science International, found that better performing businesses focused on a strong marketing program enabling them to solidify their customer base, take business away from less aggressive competitors, and position themselves for future growth during the recovery.
Here’s a great example of a new campaign that Ikea launched as a part of the #stayhome movement. As Laura Durán, marketing director at IKEA Spain, explained, “we invite everyone to view their home from a different perspective and make it a place where, during this time, we can all live new experiences together.”
It accelerates positive change.
As offices across the country are learning, these new circumstances are forcing us to adapt our approach and modernize the way we do business. Some of these changes may have been much-needed prior to the pandemic, but falling to the side on the priority list. Working from home may have accelerated the improvement of your internal communications or cybersecurity system. Or when you can no longer get your sales team in a room together, it’s critical to find a reliable online management tool.
Many brands are now increasing their online visibility in ways they may not have prior to the pandemic. These changes will continue to benefit them for years. For example, home builders who have been experiencing a significant drop in in-person home showings (either due to restrictions or pre-cautions) have been forced to conduct tours of their model homes online. We’ve seen a huge uptick of 3D walk-throughs or video showings, content that has the ability to reach large numbers of people and will continue to be relevant.
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It’s easy to get bogged down by the amount of news covering bankruptcies, unemployment, credit crisis, business closures, etc. But there is still plenty of positive information out there and plenty of potential outcomes for this challenging situation. With the right mindset and strategic approach, we’re confident your business can come out of this thriving.