Opinion
20 Jan 2012

Why you should market in a recession

Kevin Roberts on why the brand should be at the heart of everything - even in tough times

Kevin RobertsRecessionary investment is a slippery science. In tough times, business leaders are inclined to lower product prices, cut spending on research and hack at the ad budget like Sunday golfers flailing round the course.

The benefit of the safe option is that it brings with it a sense of security. But opportunities are lost as everyone hibernates. Ideas do not bow to the timetable of events.

They are the currency of the future. The smart movers don’t farm; they hunt. For example, in the dark days of 2001 Apple launched the iPod.

There is a body of evidence to support the idea that increasing advertising in a recession helps brands steal a march on the competition. Of course, scale, breadth and deep pockets play a role. The car industry is fertile territory for this argument. In the latest recession, Mercedes (Taiwan) and Hyundai (America) made big gains in market share by spending a lot on advertising. Part of Hyundai’s acceleration came from its assurance to take back customers’ cars if they lost their jobs – an intimate gesture that goes to the heart of the issue.

Toyota, in a period before today’s challenging environment, grew for 20 consecutive years in the North American car market, gaining market share through three downturns. It did this by launching products and investing in strong brand building. Notably during that time, Toyota made higher market share gains during recessionary periods than non-recessionary periods.

A glance at Twitter today confirms we live in less happy times. It’s what I call a VUCA world: volatile uncertain, complex and ambiguous. Only fools claim to know how long it will last. But advertisers’ cash reserves are up and opportunity knocks. So how far to commit the ad budget and how long will the benefits flow?

A long way, I say – and not just because I would say that.

The reason is human nature, not the next research study. People are emotional. How do we choose a car, a house, a husband, a wife? We spend ages rationalising and then go and do the opposite. As the neurologist Donald Calne said, “Reason leads to conclusions; emotion leads to action.”

In a VUCA world, our everyday decisions come under more scrutiny than ever. People want to spend less but get more. It’s Dickensian – “A penny saved is a penny got.” Consumers will take control of value for themselves. We distinguish between true value and false economies.
We juggle options any way we choose – plus ça change, plus c’est la même chose. We decide with our emotions. In these topsy-turvy techno times when everyone is always switched on, we live for, and in, the moment and we share everything at warp speed. Emotion rules and it is returning epic premiums.

It’s a mistake for a brand to end its conversation with customers. The right move is to get closer to customers and win new ones. Brands should deepen the conversation through empathetic insight into how their audience is feeling and then have the creative foresight to do something about that before the competition.

This separates price-driven value (or war) and priceless value. Today’s question is not: “How cheap are you?”, it is: “How will you improve my life?” And the right answer puts the brand at the heart of everything the consumer does, not the customer at the heart of everything the brand does.
Smart business leaders recognise that there are different ways that value plays with consumers. And they should all aim to inspire both love and respect.

The progression goes from product (“It’s not what I really want, but it’s cheap”), through fad (“This is fun, but do I really need it?”) to brand (“This is good value, but I could live without it if I had to”) to the ultimate love mark (“I will make sacrifices before I give this up”).

Such priceless loyalty reframes value to match emotional states, and surprises with the obvious. Hyundai’s car-back programme did it. Toyota Prius’s button-start ignition did it, turning process into experience. Procter & Gamble emphasised overnight dryness for babies so that toddler (and parent) can sleep right through the night.

Procter & Gamble, famous for investing and winning through good times and bad, works from the consumer backwards. P&G’s winning way is to be “purpose-inspired and benefit-driven”. Brand owners must see recession as an opportunity: give consumers options, stay the course in communication, innovate to address needs and, through insight, adjust their conversation to win both minds and hearts.

For brands, the question shouldn’t be whether marketing spend is an investment; the question should be: “How can my brand improve the customer’s life?”

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