3 Marketing Mistakes Brands Make During Recessions

Recessions are critical periods for brands and consumers and with looming economic uncertainty, we wanted to look at a three common mistakes that brands make online when navigating financial crises.

Assuming Revenue Stops

During recessions buyers will still continue to spend money, just in a way that’s smarter and better fits their budgets. Brands often assume that recessions mean buying behavior changes drastically when in many cases it just slows as individuals and families readjust to new normals.

As part of that assumption, brands will often significantly cut advertising/marketing budgets, reduce staff and alter promotional activity when the reality is that recessions are backwards looking and by the time a recession is academically declared, consumers are already recovering and spending.

Making drastic changes today to account for behavior that occurred three months ago is a poor decision that will leave your brand vulnerable at the critical times when you need to re-establish and re-introduce your offerings.

Lack of Empathy

Subscription services really struggle with empathy because they don’t approach churn and downgrades in a way that gets consumers excited to re-enable the relationship once financial conditions improve. Subscription organizations are built on the idea of reducing churn by any means possible instead of embracing churn as part of the user experience and leveraging empathy to build connection with their audience.

Services often design experiences where cancelling or downgrading an account requires finding a hidden link on a UI panel then jumping through hoops and sending attestations and clicking 20 popups asking if you’re really really sure you want to do this. Brands falsely believe that making it hard to cancel will keep subscription rates higher.

However these hassles kill the ability to recapture these consumers later because you’ve introduced a negative experience into what had likely been a positive relationship.

Brands can balance churn with empathy and if you don’t believe me, check out Sparktoro’s approach.

Assuming Permanent Behavior Changes

If you had a marketing approach that worked before a recession, it will work after. Brands incorrectly assume that basic consumer behavior will change because people will now be more cost/value conscious but with the exception of extreme periods of economic decline, the drive to spend money and on products and services outside of basic needs will return and often in higher amounts. Luxury brands tend to suffer severely during recessions but recover just as quickly and then some once prosperity returns.

Don’t permanently shelve a high performing campaign. Pause, rework and restart when conditions improve.

If your brand is struggling to navigate the economic uncertainty, let AVX develop an online marketing strategy to stabilize, grow and prepare your brand going forward.