In times of economic uncertainty, customers tend to stick to their buying habits. They know what brands they trust and are familiar with, and they are reluctant to try new things. As a result, businesses must work harder than ever to win over new customers and keep their existing ones loyal.
The most successful brands will be those that commit to a purpose and values strategy. Customers want to know that the brands they support share their principles and are committed to making a positive impact. Marketing teams need to focus on strategies that create long-term relationships with customers, rather than those that simply drive short-term sales.
Nine percent of companies emerge from recession stronger, according to a study by global consultancy McKinsey. The research, which analysed data from more than 1,000 public and private companies across eight industries in 16 countries, found that those who focused on customers, employees and cash flow during the downturn were more likely to outperform their rivals when the economy recovered.
While the study found that cutting costs was the most effective way to weather a recession, it also found that companies who invested in growth strategies such as marketing and R&D were more likely to come out of the downturn stronger. This is in line with other research which has found that companies who maintain or increase their marketing spend during a recession are more likely to outperform their rivals.
So what does this mean for brands?
1, it's important to have a clear understanding of customers and what they value. During a recession, customers expect brands to commit to purpose and values as well as offering good value for money.
2, it's important to invest in team and keep motivation.
3, cash flow is vital so make sure to have access to emergency funding if needed. Brands following these steps, emerge in a strong position from most storm.
The most effective way to do this is to concentrate investments on highly focused long term communication programs, including loyalty programs that provide customers with an incentive to keep doing business with the brand.
When priority is long-term relationships rather than simply driving short-term sales, customers will be more likely to stick with the brand during and after recession.
Building loyalty and trust that will last long after the economy recovers is about building programs dedicated to #alignment of Brand and Customers’ values.