Is Innovation Recession-proof?
Jul 20, 2009
Has the recession limited marketer’s willingness to experiment with new, innovative strategies? I’ve seen several articles on how marketing managers aren’t willing to take on unique, pioneering marketing projects since the economy went south. I understand budget cutbacks and needing to do more with less but isn’t this the time for companies to set themselves apart with mold-breaking marketing strategies that will help them outshine the competition?
There are ways to be innovative without breaking the bank. Consumers are still buying – just in smaller amounts and decreased frequencies. But what happens when the economy picks back up? Marketers need to make sure they’re in front of their target market when spending does resume, or their customers are going to turn to competitor’s alternatives.
A recession provides an opportunity for competitors to motivate customers to switch brands through a lower cost or a better offer. This is particularly true for products with a high elasticity. A recent NPR article states that customers tend to stick with the brands that they trade down to during a recession. If you realize you’re satisfied with a lower cost substitute product, why go back to the original, more costly brand?
According to a Dec. 2008 Nielsen study, companies that invested more heavily in sales and marketing during the 1980s US recession, benefited from higher growth rates after the recession than companies that decreased marketing efforts during that time. The more you consistently stay in front customers during the recession, the better chance you have at preventing your customers from switching brands.
In spite of the fact that most marketers have less budget this year, they still need to market to their customers, even if it means relying more heavily on good ideas than on deep pockets. Gone are the days of spending superfluously with a blanket marketing approach; instead, take the extra effort to be more efficient with your marketing dollars. If you challenge yourself now to come up with innovative marketing ideas despite budget cutbacks, you’ll likely be in a much better position when the economy does pick back up.