MEblog

“We have a philosophy and a strategy. When times are tough, you build share.” — Procter & Gamble CEO A.G. Laffley

As this CEO of P&G points out, making it during a recession is largely about adopting a fearless attitude, a well thought-out plan and the courage to believe-in your approach, then combine them all and move boldly forward. 

Yes, this is coming from a (seemingly) recession-proof soap producer, however what they understand is something most businesses don’t. The fear that grips businesses in a recession is a massive opportunity.  During times of slowdown, the marketing landscape becomes less intense so there are less players competing, and advertising rates drop.  This means marketing messages are more easily noticed by consumers. This. In turn,  provides those brands that continue to invest, the opportunity to capture new mind — and market — share. 

This can have a two-fold effect on the category, because brands that continue to market themselves win-over their competitor’s customers and gain valuable momentum after the recovery. 

For instance, during the recession of The 70’s, Toyota was already offering a fuel efficient product line that complemented the high fuel prices of the day. Yet the industry was anything but recession-proof. (Who buys a new car when they don’t know how much longer they’ll have a job?) However, instead of cutting their advertising they stayed on the marketing offensive.  Shortly after the economy recovered in the mid seventies, Toyota went from the third to top import in the critical car-hungry market of the USA. 20-plus years later, they did what many once thought was the impossible: they overtook General Motors as the world’s largest car producer. 

Clean, clear-cut approaches to marketing during times of downturn can wash away competition and allow you to float to the top. Both during and after a recession.

“It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return-on-investment at lower cost than during good economic times.”

— John A. Quelch, Professor, Harvard Business School

An ivory tower kind of guy who most of us small business people can’t relate too. But we can — in fact should — apply his wisdom. While Harvard’s Professor Quelch uses the word ‘advertising’, if we apply the broader term ‘marketing’ this wise quote still holds water.  Particularly these days. Economic online marketing opportunities abound, but for our money, nothing beats getting out there and getting in front of people sympathetic to, supportive of, or — best of all — advocating, your cause. 

Word-of mouth is not only the lowest cost form of advertising, it’s the most effective. And in this rapidly evolving, morphing, and twittering digital time we find ourselves, it’s never been easier for one individual to reach and influence others. 

The greatest investment to make word-of-mouth work for you is time. Time to do your job well. Time to spend listening to your customers. Time to improve what you do, and then — most relevant to this post — taking the time to talk about you, what you do and you can play a supportive, beneficial role in the lives of others. 

If we are honest and authentic, we will be successful. 

If others tell their friends about us, then we’re on our way to the top of our class.

No, it’s not blistering economic times, but who likes blisters anyway?

Not to make light of the situation, but there is still business to be done out there. If you sell a viable product or service, and you love what you do for a living, recessions have the potential to be fun.

Yes, fun.

It’s a time to step back and figure out what you’re great at, what needs work and what you should probably no longer be doing. In essence, it’s an opportunity for you to get better at what you do, which is gratifying. And gratification is fun.

So is building your brand. In fact, it practically requires that you have fun. And don’t let the word ‘fun’ mislead you into thinking that this is brand-building is an indulgence. Recessions are not only an imperative time to get your (well-honed) message out there, as you will see in the following posts that follow, investing now will benefit you long-term, also.

Now you may ask, ‘shouldn’t we just be looking to survive?’

That may be true for some, but survival rarely comes from a place of passion. For the passionate, thriving — during any time — is the goal.

And passion is the fuel.

Over the next few weeks we’ll share with you, why — and in some cases how — you must apply that fuel now:

“Losers cut marketing in a recession, and the result is they simply accelerated their loss in market share after the recession.”

— Larry Light, past global CMO of McDonald’s

Of course this is the former CEO of one of the world’s fiercest and most successful marketing machines. Easy for him to say. So how do we apply their advice to the situation of us little guys? We could start by asking ‘Why is McDonald’s successful?’ There are many reasons but let’s boil it down to three basics: research, systems and marketing. They use research to identify trends, then they ask questions and — most importantly — listen to what customers want. Now you and I don’t have the budget to research the way Ronald does, but we do have the internet, and more often than not it’s a very lucrative place to dig for information. And all it takes is an investment in time.

What the big guys do with the information they attain, is they test it. On different people in different geographical regions to see if their latest marketing idea will be accepted. They ask questions, and use the responses to shape their ideas into being even more acceptable. And when they feel certain they have a winner, they plop it into their system and launch it. Sometimes it’s a massive hit (The Justin Timberlake infused ‘i’m loving’ it’ campaign launch). More often than not it’s a success (summer movie collaborations). And
sometimes they flop in many markets, but the moderate successes they do have can turn the product into once-in-a-while promotion (McGriddle and the McDLT).

The result is a business that continues to profit, grow and dominate their category. Worldwide and during any economic condition.

No wonder they’re known as The Golden Arches.

StockTradingToGo.com lists 17 recessions since the Great Depression.  So it’s not the first time we’ve been here, the exciting thing is we can look back and learn some things from it. 

One of the key themes in all of my research into it is that the Great Depression brought people together. It became one of the unique times in history where money actually brought people together instead of tearing them apart. So this blog is one of the places we can start to do just that.

This recession is a huge opportunity for companies that can afford to prudently invest in their branding/marketing communications. Brian Meckler states in his article “Marketing In A Recession” that “a study of business-to-business companies during the 1981 recession states that businesses that increased their advertising expenditures during that time saw an increase in sales of over 200% compared to those that cut. This is most likely due to their competition deciding to decrease their advertising budget. Now is the time when customers want to hear from you and learn how you can make their lives better.”

Like I said business is about people relationships and the long term, all of those relationships can start with a handshake and taking the time to listen. I always try to take the time to make introductions and meet with new people. There are so many great true stores of the amazing connections, ideas and plans that came about just by taking the time to say hi.