Investment in marketing becomes even more crucial in crunch times
The age old trend of slashing marketing budgets when under financial strain might well be counter-productive, according to Nona Koza, Business Partner at Johannesburg-based marketing and advertising consultancy Oliver South Africa. Koza stresses that customers need to count on their brands when times get tough.
This is a challenge when brands tend to retreat into their shell and project a low profile in times of low financial liquidity. When the economy is struggling – as South Africa’s is at present – consumers tend to become more conscious of brand value when choosing to spend their money, according to Koza.
A recent report from Deloitte, which used social media activity as a barometer to determine consumer sentiment across South Africa, revealed that the biggest priority for consumers is value for money or affordability. Koza argues that brands that demonstrate confidence tend to benefit at such times.
When a brand is visible during times of low spending, consumers are more willing to place their confidence in the brand. Marketing and branding is crucial in this regard. Costs can still be cut, according to Koza, without resorting to the traditional strategy of sending the marketing budget plummeting.
When brands struggle financially, revised marketing strategies that clearly lay down company priorities are key to the welfare of a company. Prioritising marketing functions in a way that adds the most value to a brand is a way of cutting costs yet keeping the marketing function active at a brand. Digital marketing is also a strong tool to extract maximum value.
“What you want to pursue is customer retention. How are your customers using your products? Who are your best customers? How do you reach them more directly? For example, the cost of one billboard can cover several breakfast events with key customers. The key thing here is targeted customer engagement and much more face to face interaction,” explains Koza.
Commenting on the traditional strategies of cutting budgets, Koza said, “It’s a mistake that brands make worldwide. Research shows the contrary is true: if you keep up your brand activity during austere times, when the economy swings up again you make a lot more money. The reason why is something we often forget: consumers buy a value. It’s a promise of what that brand is going to deliver. In tough times, when the brand becomes less prominent, it comes across as a lack of empathy. Your customers are struggling - where are you?”
