Economic pressure affects consumer spending patterns.
Consumers become more price conscious and less likely to stay loyal to particular brands — unless they believe the brand can offer them something they can’t get anywhere else.
That’s why it’s crucial, even during a recession, to invest in strong, compelling, and identifiable branding. While it may sound counterintuitive, businesses that proactively invest in their branding during an economic recession are more likely to survive and often emerge stronger than their competitors.
If your marketing activities aren't successful or you're not attracting the right customers, that may be a sign that your branding is weak. Revitalizing your brand strategy can not only help your company weather an impending economic storm, but also take advantage of opportunities that arise as the economy recovers.
Given the shifting consumer behavior and price sensitivity we’re seeing with the current economic climate, it’s wise to take a long look in the mirror and identify new ways to use your branding to connect with customers and accelerate sales. We’ve assembled a guide to show you exactly how to do that.
What Is a Brand Foundation?
Your brand foundation is the bedrock of your company.
Composed of several key factors — including the company mission, values, and vision — you need a strong brand foundation that defines your brand’s identity while supporting the rest of your organizational infrastructure.
Elements of a Brand Foundation
Almost every brand foundation can be broken down into six key elements: the brand's purpose, followed by its vision, mission, values, personality, and positioning.
Purpose
Your brand’s purpose is the motivation behind everything your company wants to achieve, beyond profit alone.
It should be clear, distinct, and reflect your brand’s broader societal impact while defining its role within the industry — and world.
It should also resonate with your target consumer and encourage them to connect with your brand at an emotional level. Since most consumers rely on emotions when making purchase decisions, they’re more likely to buy from a brand that speaks to their deeper concerns and needs.
Brand purposes should always answer the question “Why?” Consider why your company wants to have a specific impact on its customers, industry, and society at large. Here are some example brand purposes to get you started.
Vision
Brand vision may sound similar to brand purpose, when in fact it takes the concept one step further.
Your company’s vision statement is all about goals — both long-term and short-term. Where your brand purpose answers the question “Why?,” your brand vision should have a concrete answer to the question “What for?”
If your brand vision feels unclear, take a moment to look at the problems your company wants to solve. You’ll have a clearer picture of your vision when you consider how solving those problems can have a widespread positive impact.
Having said that, your brand’s vision statement should be short and sweet. The best brand vision statements are pithy and punchy, but also memorable. You want it to describe your company’s aspirations and goals while keeping it brief.
Likewise, it should demonstrate your company’s ambitions while inspiring your stakeholders to work with you towards a common goal. Learn more about how to write an outstanding vision statement.
Mission
Use your brand’s mission statement to build on the themes that you already established when writing your purpose and vision.
A mission statement is an action-driven statement, usually one to three sentences in length, that communicates what the company is doing to fulfill its stated purpose. It outlines the practical steps involved in what the organization does, how it accomplishes those tasks, and for whom it accomplishes them.
In contrast to the more aspirational tone of your vision statement, your mission statement should briefly summarize the steps your organization is taking to make its vision a reality. Above all, it should answer the question of “How?”
Values
Values are the guiding principles that define what the brand stands for and how it behaves. They serve as a compass for decision-making and shape the brand's culture, strategy, and stakeholder interactions.
Your brand values shape everything from how your company treats its employees to its sustainability practices. These values should be unshakeable and consistent across every element of your brand foundation.
Consumers want to see that your business practices align with your brand values. Read more about how your company can develop and stick to a cohesive set of brand values.
Personality
If your company was a person, consider what type of person it would be. This is your brand personality: a set of human characteristics that your business evokes through its tone of voice, visual identity, and customer experience.
Your brand personality shapes how your consumers view not only your business, but its products and services. The best brand personalities elicit an emotional response, guide consumers to consider your brand over competitors, and promote loyalty.
Stanford graduate Jennifer Aaker identified five brand personality dimensions based on existing psychological research. Determine if your brand personality is one of sincerity, excitement, competence, sophistication, or ruggedness.
Positioning
There’s something about your company that sets it apart from the rest of the industry. That quality is your brand positioning — in other words, the unique value your company offers customers.
You can also think of brand positioning as the space the brand occupies in the minds of its target audience. It should shape how consumers perceive your brand relative to its competitors, as well as what specific benefits it offers its customers.
A strong positioning strategy is a necessary component of every brand foundation. No matter the service or product your business offers, you want your customers to think of your company whenever they have a need for something your product or service fulfills.
For example, people often ask for a Kleenex rather than asking for a tissue. This is a perfect example of how your brand foundation can use positioning to make your company the go-to choice in the mind of the consumer. Learn more about successful brand positioning.
Related: Build an All-Encompassing B2B Brand Strategy
Why the Strongest Brands Survive Recessions
Consumers naturally become more frugal and spend less during a recession. When the recession affects sales, many firms tend to follow a similar pattern and make sweeping changes to their own spending practices. They lower prices, reduce marketing spend and advertising budget expenditures, and put new investments on hold.
Here’s the trouble with that approach. Because customers are choosier about how they spend during a recession, they’re far less likely to buy from a business whose branding fails to align with their needs.
Businesses can solve their recession woes by investing more — not less — in every aspect of their brand. A strong and consistent brand foundation will never fail to send a powerful message to even your most cost-conscious target customers.
Below, we explain why the strongest brands always survive economic downturns.
Strong Branding Means Stronger Marketing
The greater your brand’s impact, the greater the advantage for your marketing. A strong brand foundation should align your brand’s personality with your business goals.
This boosts the efficacy of your marketing efforts in a few ways:
Builds Trust
A powerful brand establishes trust with your target market. Consumers who feel confident in your brand image are more inclined to interact with your marketing communications and choose you over a competitor.
Brands with consistent brand messaging, such as Mcdonald's and Starbucks, continue to succeed in new market fronts. That’s because customers trust these brands to deliver the same quality of products and services at every franchise location.
Increases Brand Awareness
Your target customer should be able to recognize your brand based on visual cues (logos, design aesthetics), auditory cues (sound bites, jingles), or both. In other words, when a brand elicits a sensory response in the consumer, it grabs their attention and solidifies their awareness of the brand.
That awareness is one of the clearest signs — and among the better marketing benefits — of a successful and persuasive brand foundation. Check out this guide to learn more about increasing your company’s brand awareness.
Stands Out From Competitors
When there are countless options to choose from, most customers learn toward the brand they already know and trust. This is true whether the economy is booming or in a recession.
An unforgettable brand makes your products and services stand out from the rest of the industry. Customers begin to associate your brand with the ability to satisfy a specific need, which means they’ll think of it before they think of your competitors.
Given how competitive markets become during a recession, invest in your branding to distinguish yourself from the competition. That ensures your survival and your long-term success.
Customers Are More Loyal to Strong Brands
Brand investment is about shaping how customers perceive your company.
Customers are most loyal when they associate your branding, as well as your products, services, values, and overall mission, with positive emotions.
Brand visibility goes hand-in-hand with customer loyalty. The strongest brands use compelling marketing plans to increase their online and offline share of voice through digital marketing, content marketing, and traditional advertising spend.
By interacting with consumers across various channels and touchpoints, including social media, brands can deliver outstanding customer service — and cultivate customer loyalty at the same time.
Strong brands also enjoy a higher perceived value because customers associate strong branding with success. Higher perceived value not only enhances customer loyalty, it also increases the likelihood of successful word-of-mouth and referral marketing.
You Can Become an Industry Leader if You Quickly Adjust When Your Competitors Don’t
To become an industry leader, you need to be resilient — especially when facing a recession or economic turndown.
Investing in your brand is one of the best ways to quickly adjust to changes in the market and stay ahead of the competition. This requires a willingness to take risks, embrace innovation, and constantly seek new opportunities. Succeed at this while your competitors struggle to keep up, and your brand investment becomes your greatest advantage.
Customers will be more likely to choose your company over your competitors because they trust your brand’s messaging and believe in your ability to deliver quality products and services.
Even in a constantly changing market, this keeps you ahead of the curve.
You Might Like: The Key Differences Between B2B and B2C Audiences
How to Market Your Brand During a Recession
Consumers make budget cuts during a recession because they want to conserve and limit resources for only what they need.
That doesn’t mean you should do the same with your marketing budget and risk losing your visibility with customers. When a recession strikes, remain in front of your customers — never behind.
Think about marketing and brand optimization as long-term survival strategies, because the reward typically doesn’t arrive until the recession has ended. Those brand investments will pay dividends once the economy recovers: you become the go-to brand for customers and gain sizeable market share.
Uber, Venmo, and WhatsApp are notable examples of companies that succeeded despite being their founding during the last recession of 2008-2009. These companies made marketing investments when the economy was bleak, yet those investments paid off.
We’ve outlined a few recession marketing strategies that your company can use during an economic squeeze.
Understand Recession Psychology
When you invest in your brand during a recession, consider how your company can persuade its target audience to think, "I need this product or service right now.”
Market research is the first step. Understanding your target customers' needs, desires, and behaviors becomes even more crucial during an economic slowdown because consumers make purchase decisions based on the perceived and tangible value of a particular product or service.
Your marketing team can examine your customer’s needs to determine which subcategory of recessionary psychology your potential and current customers fall into, how that will influence their purchasing decisions, and how your company can adapt to their new priorities.
Traditional customer characteristics, such as lifestyle, demographics, and income range, may be irrelevant to marketing during a recession. Speak with your customers to learn their needs, then reframe your marketing approach to suit their behavioral and psychological response to the recession.
According to Harvard Business School Professor John Quelch, case studies support that consumers can be categorized into one of four different groups.
- Slam on the breaks: These are the consumers most affected by a recession, such as a person who has lost their job. They will typically limit their spending to necessities until the downturn ends.
- Pained but patient: These consumers have suffered financial losses and are experiencing economic uncertainty. They have adjusted their spending behavior but remain optimistic in the long term.
- Live for today: This group tends to be single, younger, and urban. They haven't experienced the direct effects of the recession, often because they still have jobs and are not cautious spenders. They maintain their normal spending habits and only adjust their behaviors if they lose their job.
- Comfortable: Comfortable consumers have a sufficient financial cushion to see them through the recession. They didn't lose much, if anything, to the market downturn, but there is still a level of caution in their behavior for the duration of the recession.
Use these consumer categories to predict consumer behavior when the market slows and make the necessary adjustments to accommodate your audience.
Staying ahead of the recession requires you to pinpoint shifts in your target customer’s psychology, learn how that will influence their purchasing decisions, and determine how your company can adapt to their new priorities.
Based on previous recessions, it is safe to say that consumers' appetites for new products and services has continued unabated. There’s no reason to stop marketing or creating products that add value for consumers.
Check Out: 4 Key Elements in Designing a Corporate Identity in 2023
Streamline Your Product Portfolio to Reduce Decision Time
When economic resources are limited, businesses should concentrate on their core, high-margin items to maximize operational efficiency.
Examine your product portfolio and metrics to determine which, if any, products or services add too much complexity to your operations. Then, reallocate your marketing costs to focus on high-value products that consumers still need or want even after a recession has severely reduced their purchasing power.
This isn’t as fundamental for shorter recessions, but economists remain unsure how this recession will play out. Having said that, businesses should consider taking the following actions:
- Minimize complexity: If your business offers a wide array of services, it's time to simplify. It’s more challenging to provide a broad spectrum of products and services during a recession than it is during a boom period. Your product decisions need to be based on efficiency.
- Prioritize value and purpose: Customization is now a common feature of many goods and services, which increase complexity and decrease profit. Prioritize your products’ value and functions, which have more influence over buyer decisions, over customization.
- Don’t compromise innovation: You are more likely to survive a recession if you maintain a product line that meets certain stable market needs. Stable and shifting market needs aside, there will always be a market for innovative products. Continue to study the market for opportunities to provide novel, cost-effective solutions. Review competitor products to discover any gaps that your business can fill.
Improve Affordability by Modifying Product Quantity
Recessions force businesses to reconsider their pricing approach. Here are some tips for reevaluating your pricing.
- Review and reevaluate your worth: Know how much your customers value your service and what they’re willing to pay. Contact your clients often to learn how their valuations change as economic circumstances shift. Customer surveys, interviews, and focus groups are some of the best ways to obtain this information.
- Make fresh product bundles at various price points: Develop low-cost product bundles that create value for your customers and save them money at the same time, without undermining your perceived value or current price points. Revise your profit margin to create an opportunity to discount or offer sales on product bundles, which can drive and sustain sales during a recession.
- Reduce costs rather than boost revenues: Aim to reduce costs and increase your business's efficiency as much as possible. Maintaining your existing customer base is far less expensive than acquiring new customers, and existing customers make repeat purchases. Use content strategy, marketing campaigns, loyalty programs, and various communication channels like social media and email to engage repeat customers without increasing your ad spend.
- Invent something new: If you can, spend time and resources creating something new to the market. You will automatically have a valuable proposition if you can help other firms survive the economic slump, and this will boost your chances of surviving.
Bolster Brand Trust in Your Audience
If your business can improve their lives in a meaningful way, it’s easy to use branding to bond and develop trust with your clients during a recession.
You and your customers are in this together. That means you can invest in your branding to start including discounts, redeemable loyalty points, or flexible payment services that help them. Clear communication is also an important loyalty-building tool, so keep the lines of communication open. Ask your customers for feedback and encourage them to share positive reviews.
Maintaining a loyal customer base is not only essential during a recession, but also the quickest way to reduce the duration of the downturn. Your brand should be at the top of customers’ minds when the economy starts to improve.
Conclusion
There are always opportunities to use branding to your advantage during a recession. When updating your brand, focus on the specific economic issues that your primary consumers now face. What actions can your company take to cultivate customer loyalty that lasts beyond the recession?
Businesses that invest in their branding can still benefit and create opportunities for growth during a recession. You can prepare your business with the tips in this article or contact Anyday to provide the branding expertise you need to stand out, attract, and retain customers during and beyond the recession.
.svg)
