A reporter asked me the other day if marketers should weather a recession by putting strategic branding activities on hold and instead focus on tactical promotions that drive short-term results.
I don’t know whether the story will run, but I thought I’d share my response.
Consumer spending accounts for nearly two-thirds of our GDP. Consumer spending rises and falls with consumer confidence. During uncertain times consumers look for safer bets than during boom periods.
So what should brand marketers do? Certainly marketers must create new ways to provide value. Starbucks recently announced the return of its $1 short coffee. Our clients at Best Buy are offering free appliance delivery and recycling. And United Airlines, another BD’M client, is partnering with Visa on a Beijing Olympics promotion.
But beyond price promotions, I believe empathy and authenticity become increasingly important sources of brand differentiation in a recessionary environment.
During uncertain times we tend to place our trust in those people, brands and institutions we believe truly understand us. When every dollar counts we take fewer risks and are likely to choose brands that are highly relevant to our immediate needs. We seek products that represent a genuine value, not because of a price cut, but because they deliver on their promise.
Empathy and authenticity are essential ingredients in any healthy brand, even during good times. But now, more than ever, marketers must earn market share by being the brand consumers believe is the most relevant and genuine value.