{"id":48341,"date":"2022-08-18T21:36:52","date_gmt":"2022-08-19T01:36:52","guid":{"rendered":"https:\/\/hearts-sciencecom.local\/?p=48341"},"modified":"2022-08-18T21:42:06","modified_gmt":"2022-08-19T01:42:06","slug":"investment-brand-building-and-empathy-how-marketers-can-weather-the-latest-cycle-of-economic-anxiety","status":"publish","type":"post","link":"https:\/\/hearts-science.com\/en-au\/investment-brand-building-and-empathy-how-marketers-can-weather-the-latest-cycle-of-economic-anxiety\/","title":{"rendered":"Investment, brand-building, & empathy: how to weather current economic anxiety"},"content":{"rendered":"

Headlines around the economic outlook have been confusing at best, and alarming at worst. Consumers face surging prices, supply chain pressures, and the prospect of more interest rate hikes. Speculation about whether another worldwide recession is imminent is rife, perpetuating the cycle of economic anxiety among Aussies who, pre-COVID, hadn\u2019t faced a recession since the early \u201890s.<\/p>\n

What it all means for consumers and marketers has been the subject of debate locally and at Cannes in recent months, with many believing that 2023 will see a pullback in consumer spending \u2013 if not earlier.\u00a0 If there is a silver lining, it\u2019s that history repeats itself; it\u2019s not our first downturn, and it won\u2019t be the last. We have the opportunity to plan ahead for what may come \u2013 and remind ourselves of what we can to do to address the moment<\/p>\n

Ahead are four key considerations as we weather the storm and look for answers:<\/p>\n

1.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>\u00a0Consumer perception is the current reality<\/strong><\/h3>\n

Some have said that the current consumer anxiety around the economy is overblown. That may be true \u2013 but the fact is that consumers are anxious, even if they have no \u2018real\u2019 reason to be (though $11 lettuce was a compelling reason for many!). Consumer confidence fell for the ninth consecutive month in August, with current levels sitting on par with those during the Global Financial Crisis.<\/p>\n

Even if nothing is \u2018happening\u2019 by some metrics, consumer perception is that something is happening, and that will have an impact on what they will or won\u2019t spend on \u2013 whether it\u2019s choosing a less expensive item at the grocery store, choosing used over new, or even paying more for a product that will have longevity.<\/p>\n

What does this mean for marketers?<\/strong> Recognise what consumers are feeling, be empathetic to that, and adjust accordingly. Amid the Global Financial Crisis in 2009, Hyundai introduced its \u2018Assurance\u2019 campaign, giving consumers the confidence to buy by covering their payments if they got laid off.<\/p>\n

While not every brand can cover costs for its customers, every brand can adjust the tone of its marketing communications. We have seen over the past two years of COVID-19 that people are reporting a greater strain on their mental health, and increased anxiety about their financial futures is poised to continue that trend. Peter Field\u2019s 2020 study of case studies from the 2008 Global Financial Crisis pointed to humanity, warmth and, where appropriate, humour in communications as being the most effective.<\/p>\n

2.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>Communicate your actual value<\/strong><\/h3>\n

When belts tighten, brands increasingly need to prove to consumers why spending is worth it. That doesn\u2019t necessarily mean it\u2019s time to shout about low prices; instead, brands should think about the actual value they can provide to consumers and bring that to life.<\/p>\n

For some brands, that might be price. Sainsbury\u2019s\u00a0 \u2018Feed Your Family for a Fiver\u2019 campaign in the UK and Kellogg\u2019s addition of \u2018price per serving\u2019 to packaging amid the 2008-2009 recession, are two great examples. These brands focused on price as an indication of value, without shouting it explicitly or making customers feel like they were skimping. For other brands, value may come in in the form of product versatility, or how it can simplify some part of already-stressful daily life.<\/p>\n

The \u2018lipstick effect\u2019 is a consideration for other brands, who can authentically position themselves as an everyday or affordable luxury. Consumers may be nervous about what\u2019s to come, but there is also real pent-up demand for normalcy after COVID \u2013 whether that\u2019s getting take-out instead of cooking at home, taking a long-awaited holiday, or upgrading a gift this festive season.<\/p>\n

What does this mean for marketers?<\/strong> Understanding how you can authentically meet consumers in the moment starts with understanding the actual impact that your products or services can have on their lives \u2013 not just what we think it will be. Delivering a practical solution can be much more effective and impactful to consumers than discounts or special offers.<\/p>\n

3.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>Stay the course<\/strong><\/h3>\n

Industry research underscores that brands which maintain (or even grow) their ad spend in a recession gain share and improve long-term profitability, while those that cut ad budgets see their share decline. Analytic Partners\u2019 recent \u2018ROI Genome\u2019 presentation at Cannes saw that 54% of brands who maintained or increased marketing budgets during an economic downturn saw their ROI improve.\u00a0 Brands that boosted their media spend saw an average of 17% increase in incremental sales, while those that cut back media spend saw an average 18% decline in incremental sales \u2013 with the majority of that resulting from lower investment, not a drop in ROI.<\/p>\n

In addition to maintaining spend, it\u2019s also important to continue a focus on brand, and not just revert back to performance channels that can quantify a last-touch impact. Messaging that connects back to brand equity continues to outperform those focused on performance, while the synergies that come with multi-channel campaigns carry on during a recession.<\/p>\n

What does this mean for marketers?<\/strong> Staying the course \u2013 by maintaining or growing media spend, by continuing to focus on brand \u2013 will pay off for ROI in the short and long term.\u00a0 Of course, there may be situations where media budget cannot be maintained. In those cases, consider how your brand can remain visible consumers through more cost-effective owned and earned channels, UGC or partnerships.<\/p>\n

4.<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong>Consider the long-term impacts<\/strong><\/h3>\n

Outside of their immediate spending habits, it\u2019s important to consider the longer-term impact that a recession may have on consumer finances. Looking at the US, the impact of the Great Recession has had an immeasurable impact on millennials, causing them to delay life milestones and lag behind in wealth compared to previous generations. It\u2019s also impacted their attitudes toward things like home ownership, spending, and their finances as a whole, and it\u2019s likely contributed to their relative distrust of institutions (government or financial) and desire for more socially-responsible brands.<\/p>\n

Depending on how things unfold, younger millennial and Gen Z Aussies may find themselves in a similar situation \u2013 especially against a housing market that, to many, may feel increasingly out-of-reach.<\/p>\n

What does this mean for marketers? <\/strong>Brands should consider how they communicate with these younger generations in the short-term, as their experience over the next year or so will shape their future behaviours.<\/p>\n

Summing up<\/strong><\/h3>\n

So in short, the strategies we create in a recession really challenge us to be at our best \u2013 to maintain best practices in terms of investment and brand-building; to interrogate what consumers are actually looking for and how our brands can authentically deliver that; and most importantly, to be empathetic to the challenges that consumers face. Connecting what matters between people and brands will ultimately help us to deliver more connections that matter \u2013 at a time when both people and brands need it most.<\/p>\n","protected":false},"excerpt":{"rendered":"

Headlines around the economic outlook have been confusing at best, and alarming at worst. Consumers face surging prices, supply chain pressures, and the prospect of more interest rate hikes. Speculation about whether another worldwide recession is imminent is rife, perpetuating the cycle of economic anxiety among Aussies who, pre-COVID, hadn\u2019t faced a recession since the […]<\/p>\n","protected":false},"author":46,"featured_media":48317,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[28],"tags":[],"class_list":["post-48341","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-insights-en-au"],"acf":[],"yoast_head":"\nInvestment, brand-building, & empathy: how to weather current economic anxiety – Hearts & Science<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/hearts-science.com\/en-au\/investment-brand-building-and-empathy-how-marketers-can-weather-the-latest-cycle-of-economic-anxiety\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Investment, brand-building, & empathy: how to weather current economic anxiety – Hearts & Science\" \/>\n<meta property=\"og:description\" content=\"Headlines around the economic outlook have been confusing at best, and alarming at worst. 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