There's an adage that says, "When times are good, you should advertise. When times are bad, you must advertise," says Rivak Bunce, managing director of United Stations. Bunce adds that many advertisers are proceeding with what can only be described as a caution, while consumers remain apprehensive about spending in light of an unclear future.
Brand loyalty is taking strain as stressed consumers change stores, brands and the way they shop.
These factors imply that consumer retention should be a primary concern. While some brands may want to reduce their advertising spend, cutting ad spend now will result in major consequences, such as revenue, declining down the road.
Experience shows that it takes years of brand building to recover from periods of self-imposed advertising breaks. Marketers who have done the hard yards to build their brand, risk throwing it all away instead of capitalising on the reduced competition in the market.
Worse still, they run the risk of competitors taking advantage of their absence to position themselves and win market share.
We've all heard the facts and figures and can recognise examples of this already happening. Instead, let's focus on what brands can do to help safeguard themselves in an uncertain market. The winning approach may seem counterintuitive, but the main focus should be on maintaining or increasing your advertising budget.
Getting back to the basics may be equally important for brands. Regaining or maintaining customer trust is important when times are tough. Now may be the time to look inward and stick to your roots. Reintroduce your core purpose and values. Focus on your customers and continue to cater to their needs.
Ultimately, advertising during tough economic times helps project an aura of stability. Advertising is both a short and long-term play. Consumers want to know your response to a changing world.
Maintaining ad budgets at current levels is a short-term play that positions your brand as a resilient industry leader and helps reach your customers when they most need you. It's your opportunity to saturate the market with your message.
Long term, this is about keeping your brand front of mind among consumers. McGraw-Hill studied 600 companies operating during historic recessions and times of crisis. They found that those businesses that maintained or increased their ad spending over these times came out on top, not only with higher sales during the tough times but for years following as well. In fact, they found sales of aggressive advertisers increased 256% over those that didn't advertise.
The Harvard Business Review found that when times are good, consumers are likely to be loyal to a specific industry brand. But during times of uncertainty, people are looking for a good deal and are more likely to try new things. This is an opportune moment to reach those new markets you’ve been finding it hard to infiltrate in the past.
For more information, visit www.unitedstations.co.za. You can also follow United Stations on Facebook, Twitter or on Instagram.