Making Smart Marketing Decisions

Consumer purchases are heavily influenced by emotions, which can quickly and unexpectedly change. The same goes for company budgeting decisions. Sentiment can flip on a dime, particularly in the face of uncertainty, making it critical that marketers proactively demonstrate the value of their work. Effectively managing both internal and external pressures, especially during precarious economic times, then, is an understated but essential part of quality marketing.  

Take the recent collapse of Silicon Valley Bank (SVB), for example. After consumers expressed anxiety over the institutions’ financial prospects, SVB worsened the situation with a puzzling, jargon-riddled press release, which ultimately set in motion its demise. Depositors gave way to panic shortly thereafter, withdrawing more than $42 billion dollars and forcing the Federal Deposit Insurance Corporation (FDIC) to seize ownership of the bank. In addition to showcasing the interplay between emotional and economic volatility, SVB’s collapse has underscored the importance of quality stakeholder communications — especially during uncertain times. 

Luckily, there are industry best practices that make navigating difficult headwinds more tenable, methodical, and cost-effective, and can even turn them into productive business opportunities. 

Maintain Your Presence During Downturns.

Most companies would like to consider themselves resistant to recessionary pressures, but the reality isn’t so. During periods of instability — and much in the same way as consumers — businesses have a tendency to “play it safe” by pulling back on discretionary spending. The problem, however, is that they often misidentify what belongs to this category. It’s common for companies to turn to their marketing departments for immediate budget relief, but this mistake can depress revenues far more than a temporary recession would in the long run.

Taking the alternative approach and doubling down on smart marketing investments can prevent brand atrophy while helping businesses realize and execute on new growth opportunities. Below, we’ll take a look at some companies that previously employed this strategy, leveraging communications to position themselves for long-term success.

Toyota Took the Wheel.

First up we have Toyota during the 1973 economic downtown, which saw auto manufacturing severely disrupted by a sudden foreign oil shortage, new environmental regulations, and slumping consumer demand. Rather than scaling back its marketing efforts (like its competitors) as revenues promptly crashed, Toyota utilized the moment to heavily promote the company’s smaller, more fuel-efficient vehicles. Within just three years, Toyota went on to become the top US imported car manufacturer, largely a byproduct of its well-timed advertising campaigns. 

McDonald’s Competitors Were Lovin’ It.

Then, there was the 1991 recession, prompted by years of debt accumulation, another spike in oil prices, rising interest rates, and a credit crunch precipitated by overzealous financial regulators. Threatened by consumers’ tightened budgets, many fast food brands including McDonald’s quickly cut costs, with marketing communications taking a substantial hit. In contrast, chains like Pizza Hut and Taco Bell leaned heavily into value-based communication campaigns to connect with cost-conscientious consumers. The results were striking, though not surprising. McDonald’s sales declined by 28% whereas Pizza Hut and Taco Bell increased their sales by 61% and 40%, respectively.

Citigroup Banked on Trust.

More recently, we can look to the 2008 & 2009 financial crisis, spurred by banking institutions’ reckless lending decisions, among other factors. As a consequence of this downturn, a number of banks required federal bailout money, which was broadly unpopular among the American public. For the most part, banks laid low in response to growing consumer animosity, but Citigroup took a different approach. In the absence of its competitors’ presence, the bank launched campaigns demonstrating how trust was thoroughly integrated into its business fabric. Not only did Citigroup’s reputation weather the financial crisis, but it came out of the recession with newfound customer trust and loyalty, something few other businesses — let alone financial institutions — managed to accomplish. 

These examples are just a few of many, but illustrate how market instability can present lucrative opportunities for forward-thinking companies equipped with top-notch talent.

Keep Your Friends Close.

Marketers should also utilize uncertainty to proactively connect with and nurture existing customers. Retention strategies are anywhere from 5-25x cheaper than acquisition efforts, making evident the fiscal benefits of brand loyalty. And as individuals tend to be wary of trying new products and services during turbulent economic times, businesses have the opportunity to solidify existing relationships to facilitate long-term repeat customers. These are key to growing any company’s bottom line and play an especially outsized role during periods of depressed discretionary spending.

All About Cashing In.

Most recessions only last a matter of months and precede a period of significant economic growth as consumers act on pent-up demand. For businesses that put in the work and time to establish positive relations with their audiences, this represents a prime opportunity to cash in.

Though unpleasant in the short-term, uncertainty is a fundamental reality of life and business. Rather than fear recessionary times, however, companies should capitalize on them — and the best marketers know just how to do so. 

While it might feel like taking a leap of faith, embracing the uncertainty of trying times by doubling down on marketing communications could be what’s needed to differentiate your brand, grow its market share, and establish favorable relationships with key audiences. 

If you’d like to learn more about turning uncertainty into opportunity with smart marketing investments, get in touch with Antenna’s industry-leading professionals today.

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