The pandemic, supply chain disruptions, a recession and persistently high inflation are causing discouragement. Add in trends like digitalization, sustainability and increasing consumer influence, and these times are a real challenge for leaders, marketers, and HR professionals. We strongly believe, especially in these times, in a thoughtful engineering emotions methodology to form and strengthen the bond between brands and customers. We understand that this is a balance between being realistic to take action now to secure your future and looking towards the long-term future.
"Only when the tide goes out do you discover who's been swimming naked."
As leaders, we tend to hit the brakes during a recession and act defensively when it comes to communication, marketing, and innovation. The consequences are varied. One of the outcomes of defensive measures can be a loss of connection with customers. Marketing Professor Byron Sharp emphasizes the importance of continuously reaching all buyers and, from a neuroscience perspective, it is important to keep memory structures intact by staying consistently present and available. Additionally, brands that act defensively are more likely to lose “the pace of trends” and miss opportunities to capitalize on “period-related trends” to generate welcome “period-related income.” Furthermore, losing “the pace of trends” means missing opportunities that develop during crisis periods. Even long-term goals are put under pressure.
Check history, open the future! Defensive or offensive actions?
Some particularly fast-growing companies were founded during periods of economic downturn. Research from McKinsey shows, however, that the best-performing companies – the “resilient ones” – act both “defensively and offensively”. Companies that survived the crisis well did not cut back on a large scale, because some actions were the foundation for a market advantage. Companies that continued or increased their investments in innovation and communication during the 2008-09 recession performed better than their industry peers after the recession. In many cases even with a significant lead over their competitors. For example, from 2013 to 2018, the total shareholder return of companies that continued to innovate was 56 percent higher than the return of their industry peers.
How to take advantage of a recession? Dive into the life of your customer.
A consumer bank was planning to create a series of advanced new investment funds for affluent customers. Due to the recession, the management changed course, paused the initiative, and transferred part of the budget. They studied the changing customer behavior and understood the implications for their company. As a result, they created a better user-centric marketing approach for existing products. Deeper research into customer needs led the bank to shift from “pushing products” to educating consumers about finances and empowering them to make confident decisions in line with their life goals. The result: sales increased by 25 percent by gaining consumer trust. The generated income was equivalent to the original projections for the new product development.
Our role in these times? Engineering emotions that form and strengthen connections!
In times of uncertainty and unpredictability, it is important, according to research, to consistently focus on forming and strengthening emotional connections with your target audience. Our role as an integrated full-service agency is to realize that emotional connection with your brand and consumer through strategic well-supported insights within the right context and through the right channels.
