By Mark Levit As the economic cycle spins, marketers look forward to the economic highs and dread inevitable recessions. When the economy goes sour, how do brands stay alive? During an economic slump, advertising budgets tend to be the first item
cut. But history strongly suggests advertising budgets should be increased during a recession. Cutting marketing and sales budgets during recessionary periods changes long-term results. A key reason is that when advertising “noise” decreases, the voice of those still talking sound that much louder. When the competition stops or reduces their advertising efforts, it’s a prime opportunity for your brand’s message to be heard. Since your message is one of the few messages reaching customers, the odds of success are multiplied.
American Business Press, in its book “How Advertising in Recession Periods Affects Sales,” states: “The findings of the six recession studies to date present formidable evidence that cutting advertising appropriations in times of economic downturns can result in both immediate and long-term negative effects on sales and profit levels.” The Buchen Agency measured the effects of advertising for business-to-business marketers through successive recessions in 1949, 1954, 1958 and 1961. They found that not only sales and profits dropped off for those companies that cut their advertising, but in addition, when the recovery came about, these same companies also lagged behind those who didn’t cut back. In good times, marketing is important, in bad times, it’s vital. During tough times, customers look for specific qualities in a brand such as value. When customers are in need, satisfy the need. During a recession market dynamics change drastically. The key is knowing what your customers need, not what they want. Here are some simple guidelines for successful recessionary marketing:
Focus on Branding - It’s safe to assume customers will be price conscious during a recession. Therefore, it’s normal to assume that before making decisions, customers will do more “shopping around” than usual. For this
reason, marketers must focus on ways to make their brands stand out from the rest and address the customer’s doubts. Brand messages should focus on practical uses of the product and demonstrate how customers are getting high quality for a low price (value). Establishing a system of feedback for customers will also help to distinguish your product. The key to successful recessionary marketing is emphasizing value. During an economic boom customers are much more likely to pay high prices. When
times are bad customers are much more careful with their money. So marketers must focus on different aspects of their products.
Focus on Customers - During a recession marketers need to focus on current
customers, not just new ones. The assumption that any business is good business is not the case here. The best prospect is a current customer. Acquiring new customers is five times more costly than retaining existing ones. Bad times can be used to focus on existing customers and turning them into loyal customers. That can be accomplished by researching customer needs and the ability of your product (and competitors’ products) to meet these goals.
Marketing Focus - During a recessionary period, marketers should focus on the strong points of their brands and align them with their customers’ needs. A comprehensive marketing plan can help to position brands and to capture and maintain loyal
customers and profitability. A long and objective look must be taken at your brand’s current marketing activities, focusing on those with greater potential.
Recessions are never desirable, but they are inevitable. Using the right marketing strategy during tough times is the best way for your brand to survive.
Importantly, don’t decrease advertising activity. Get to know your customers and think of new ways to create value in your brand—and to distinguish your brand from others. Learn more about strengthening your brand in a down-turned market. Contact our Managing Partner, Mark Levit at 212.696.1200. | 
