Do More with Less: Marketing in a Recession

International advertising agency Oglivy offers 7 points of advice based on their experience in guiding brands through previous recessions, mixed with some of the latest academic thinking.

Here are the first 3:

1. Guard High-Value Customers

In a severe recession, share protection through retention of a brand’s most profitable customers should be the first priority. Losing loyal customers can be very costly. On average, loyal customers who are “bonded” to a brand spend up to 20 times more than the average customer. The key is to identify who they are and what their concerns are. Then you can consider whether a special initiative is needed.

2. Harvest Customers Who are Ready to Buy

The second most valuable target, after existing customers, is those who are about to purchase. Research into the decision-making process can illuminate what barriers people have. With this knowledge, there are two areas in particular where marketers can focus attention: search and shopper activation.

We often say that the first dollar a marketer spends should be on search. This is never truer than in a recession. Customers who have raised their hands declaring interest in your product deserve special attention. Marketers can improve “organic” search by tracking existing search capabilities, understanding key words and then developing strategies for content development, page tagging and linking to ensure that as many active shoppers as possible are directed to the brand’s site.

3. Optimize Budget Allocation and Channel Choice

Every marketer will scrutinize the budget during a recession. Is the overall level correct? Is the allocation of dollars as precise as it can be?

Many marketers think first about channel choice. We’ve found, however, that it helps to first examine the budget breakdown by marketing task. This is usually structured around a sales funnel, or what we call vertical allocation. What are you spending on awareness, consideration, activation, loyalty and so on? Examining budgets in this way gives a channel-neutral view. There are often opportunities to alter the channel mix in a recession.

Historically, recession businesses have tended to switch budgets from brand media advertising into direct marketing and other channels seen as more measurable…digital, which is already the fastest growing part of the media sector, could further benefit if budget-switching between channels occurs.

A 360 degree solution is still usually the best option in hard times. Multichannel campaigns have a better success rate (65%) than single-channel campaigns (58%).

This is definitely not an argument against using TV. Far from being dead, TV is one of the most efficient and effective media: campaigns using TV have a higher success rate (66%) than campaigns not using TV (49%). It is more often than not an argument for using TV alongside other channels.

However, don’t spread your budget too thin across too many channels. You may end up doing nothing much in any of them. The crucial metric in every channel is always share of voice relative to competitors. Depending on the size of the brand budget, you might find three or four channels optimum.

Next week: The last 4 tips for marketers in a recession.

Originally posted on ogilvyonrecession.com