The Incumbent Economic Downturn

The global economy is forecast to experience a recessionary period, signaled by aggressive fiscal and monetary tightening policies following a post-pandemic surge in economic activity, market shocks, and consequent inflation. Consumers and firms alike have begun to tighten their belts; the former reevaluating their consumption habits, the latter announcing commitments to reducing costs and prioritizing resources. Marketers will need to adapt existing tactics to cater to fiscally conservative consumers by concentrating on value and building customer relationships, all underscored by employing tools to develop a comprehensive and intimate understanding of their target audience.

Emphasize Value

Consumers in an economic downturn will increasingly make purchase decisions based on product value over other relevant metrics. Firms that ensure their offering portfolio(s) are value-centric, for the most part, are likely to emerge from this period with a considerable competitive advantage. Non-essential products, high-cost long-term purchases and luxury ‘wants’ are particularly susceptible to a drastic change in consumer purchasing habits. Brands in this category can opt to introduce low-cost alternatives to such products along with marketing campaigns that reinforce affordability and product value. For essential products more resilient to recession consumer habits, the core product may remain unchanged. Instead, the value-for-money proposition of the product is highlighted in promotional material, advertising campaigns, and product packaging. Being attuned to the changing tides of consumer behavior can contribute to customer retention, as discussed in the following section.

Build Customer Loyalty

Retention is key during a recession, and invaluable once it elapses. Loyal customers are the core of any firm. Purchasing habits are reinforced as consumers choose to reallocate luxury spending to essential products. This loyalty can be achieved by demonstrating the brand’s empathy towards its customers amidst challenging economic conditions through affordable and value-centric product portfolios, personable messaging that emotionally resonates with consumers, and budgetary recommendations incorporated in the brand’s product portfolio.

Empower Modified Tactics by Understanding Your Audience

Value-driven promotions and building customer loyalty are best achieved by truly understanding your customer base – utilize consumer research tools to learn about your customers’ journey, changing behavior, and preferences in response to an economic recession. Further optimize the discussed strategies that drive prudent business decisions in an uncertain economic climate, where consumer purchasing behavior is in flux. It is therefore up to firms to invest in market research solutions.

InsightsClub offers iCheck, a consumer research solution that facilitates testing, optimization, and measurement of brand upliftment in your proposed digital campaign. Discover how you can adapt your campaigns to optimize consumer activation. Reach out to us at InsightzClub to learn more.