This is the 2nd in a series of periodic guest posts. Susan Kanefield Lauinger is a senior marketing executive, strategist and brand consultant with L’Oreal, Philip Morris and American Express.
August, 2008: Do you remember what you were doing this time last year? You may remember gas prices going up, you may have heard of a friend of a friend who had been laid off from his job, but overall, things in the U.S. were pretty good.
September, 2008: Lehman Brothers files for bankruptcy. AIG requires a bailout. Stocks plummet.
Flash forward to August, 2009: The fallout from the economic crisis has touched every corner of the U.S., causing a significant shift in consumer confidence and a sea-level change in the way consumers think about their spending and consumption habits.
What Should Marketers be Doing Now to Rebuild Consumer Confidence?
1. Keep the Conversation Going — As the economy suffers and budgets shrink, it is tempting to look to marketing dollars for quick cuts. However, brands that go dark risk playing into the fear and uncertainty that consumers are feeling. In fact, Harvard Business School professor John Quelch stresses that a recession is the time to maintain, not cut, marketing spending. He writes:
“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. Uncertain consumers need the reassurance of known brands…” (Read a summary of John’s article here).
2. Remember the Basics: In these tough economic times, there is a driving consumer need to get back to the fundamentals. Consumers are hunkering down to weather the financial storm and are looking to their brands to reflect that new focus on things like price, value, family and stability.
Kraft Foods, for example, has added a “Budget Wi$e” section to its website, highlighting tips for feeding your family while watching your spending. One tab of this section called “Why Snackrifice?” highlights snacks you can feed your family “for about a dollar.”
Kraft has also focused its product advertising on value messages. For example, their advertising shows the difference between the cost of a DiGiorno frozen pizza and a restaurant pizza, or the lower cost of Kool-Aid vs. soft drinks.
Allstate is another brand that has done a good job of reflecting this shift in consumer focus with its “Back To Basics” campaign. The Allstate advertising talks about the brand’s experience managing through recessions and their understanding of what consumers need “after the fear subsides.” You can read more about this campaign here.
3. Think About the Future — Although the pressure is on brands to cut spending, raise prices and retrench in these tough times, the smartest brands will be looking to the future and laying the groundwork for the next 6, 12 and 18 months. Brands that have held fast during the recession and who are actively planning for the future will have a distinct advantage over brands who will be trying to reboot their consumer relationships in the coming months.
Keep the conversation going, remember the basics, think about the future — these are good maxims for success in any environment. But in the current hyper-charged environment where fear, uncertainty and budget conscious actions dominate, they are especially important lessons for Marketers in any business.
Susan Kanefield Lauinger is a senior marketing executive, strategist and brand consultant with deep experience in health & beauty, tobacco, and financial services with companies including Helene Curtis, L’Oreal, Philip Morris and American Express. Susan holds an M.B.A. from Kellogg and a dual B.S./B.A. in Economics and Communications from Wharton/The University of Pennsylvania.