Rising interest rates, spiking fuel prices, war in Ukraine, supply chain issues. Yes, some of us, including our clients, are getting nervous about the constant barrage of bad news — while others look at what’s happening in their own region as an economic upswing. Gas prices are up, wheat prices are healthy… hey, what’s the problem?
Which gets us to the heart of the message today. The economy… good, bad, or indifferent is purely a matter of perception and as the old saying goes, “perception is reality”. And as marketing consultants, it’s our job to help guide our clients through economic uncertainty.
So rather than debating whether we are or are not in an economic recession, lets have a plan in place if and when we start to hear recession rumblings. A down economy can actually be your time to shine. Allow us to explain.
We’ve been writing and training on recessionary periods since 2008 — the height of the Great Recession. Without getting too far in the weeds, recessions are a regular and relatively predictable economic condition. There have been 15 recessions in the last century, averaging about one every five to eight years and lasting about 11 months. But in each case, the market ends up substantially stronger — and businesses that weathered the storm, continued to share their marketing message and engaged customers in uncertain times came out substantially stronger, as well. We’re not economists, and this is a simple description of a very complex economic system, but the point is, we’ve been here before and we’ll be here again, but one thing that history repeatedly tells us is that a down economy is not the time to cut back on your marketing efforts.
In the recession of the early 1990s, McDonald’s — one of the most recognized brands in the world — decided to cut back on marketing to preserve its bottom line — choosing to ride out the storm until economic conditions improved. And it makes sense, they’re McDonald’s, arguably the most recognizable brand in the world. You see the yellow arches, and you know who they are, what they serve, heck most of us have their menu committed to memory. So, if they decide to take a few weeks off. Why not? Meanwhile, PepsiCo, which owned Pizza Hut and Taco Bell, doubled down in its marketing. As a result, Pizza Hut sales increased by 61 percent. Taco Bell sales increased by 40 percent. And McDonald’s? Sales took a 28 percent nosedive — and it took 18 months to recapture their momentum. Yikes!
The lesson: When your competitors go quiet, your clients should see an opportunity. A company’s most important asset is top-of-mind awareness and brand equity. So stop talking to them about the economy (good, bad, or indifferent) and begin talking to them about their customer. If they choose to sit this one out, but their competition doesn’t, guess who’s going to be remembered?
It takes courage, it takes commitment, and it may even take some belt-tightening, but a slow economy is the time to grow your client’s business, or they risk being replaced in the minds of the consumer.
There’s a famous quote from Walmart founder Sam Walton. Someone asked him, “What do you think about a recession?” His response? “I thought about it and decided not to participate,” we suggest the same approach for you and your customers. Don’t just be a seller. Be a consultant and we’ll all get through this together.
Watch our video “Advertising in a Down Economy” to get more tips and tricks. Not a P1 Learning subscriber? Register today for a free 7-day training demo.