How to turn a downturn into a brand advantage

The great pandemic of 2020. We might not be out of the woods yet, but we do need to solider on.

So, what’s on the horizon for businesses coming out the other end? What’s the impact of ‘the new normal’ and how do you start thinking about the future when everything is so uncertain?

Don’t worry, nobody knows what’s going to happen.

We’re not going to pretend we do. We can hypothesise, look at market reports and make relevant predictions, but even the pointiest headed strategists and advisers don’t really agree.

What we do know right now is that we are (unsurprisingly) in a recession and while that word strikes fear into all of us that were hanging around in 2008, we do know how to deal with it.

So, we have an opportunity.

Although no two downturns are exactly alike, studies that have followed the successes and failures of companies navigating recessions since the 1970s have found patterns in consumer behaviour and brand strategies that have been deployed to win in the short and long term.

Understanding these evolving patterns can help us design agile approaches that benefit a range of scenarios.

All too often, marketing budgets are often first to be cut.

Although tightening the purse strings feels like a sensible option at the time, failing to support brands or understand the shift in consumer needs can jeopardise performance over the short and long term.

News flash – it’s normal for us (consumers) to change our minds – we do it all the time!

We clever marketers can’t fool ourselves into thinking that consumerism is solely influenced by our clever advertising and appealing products alone.

Instead, we should acknowledge that we depend on our consumers having money to spend and feeling confident about their future while embracing lifestyles and values that encourage consumption.

Essentially, buying behaviours are driven by feelings, motivations and circumstance. How brands respond during emotionally challenging times can be pivotal to their ability to gain cut-through with consumers. If we demonstrate empathy and compassion for them and their situation we can connect on a whole new level.

Instead of thinking about the uncontrollable behaviour change that’s occurring and negatively impacting your brand, focus on understanding consumers’ differing circumstances and as a consequence, their mindset when it comes to change.

We’ve uncovered four consumer segments that emerge during a recession:

  • The ‘holy sh*t’ mindset:
    • These consumers panic. They reduce all spending by stopping, putting off, cutting back or substituting.
    • We see patterns of this activity in consumers with lower incomes, but don’t limit your thinking. Higher-income consumers panic too! Remember, everyone’s circumstances can change for the worse.
  • The belt tightening mindset:
    • These consumers brace for the storm. They’ve been here before and have faith that there will be good times ahead but right now it would be sensible to restrain themselves. They’ll cut back across the board but less aggressively.
    • It’s worth remembering that these guys are the largest segment and include households with a wider range of income levels, who are cautious about the future.
  • ‘I’m alright’ – The low profile mindset:
    • These consumers are comfortable and pretty certain they are going to be ok. Made up mostly by HNWI and above, this group also includes those who are less exposed e.g. those with smaller mortgages and monthly outgoings or a residual dependable income.
    • This group may be a little more selective or conspicuous in their spending habits.
  • The live for today mindset:
    • These consumers are (mostly) millennials, urban and young.
    • For the most part it’s business as normal (unless they become unemployed), but their desire for experiences over ‘stuff’ can be a barrier when the market is isolating.

Think about ways to transfer experiences online.

Consumer segments are great– they help us navigate and focus. But not all products and services are given equal weight. Depending on their circumstances, mindset and attitude towards the change, your consumers will also bucket their purchases into one of four camps:

  • Essentials (I can’t live without it)
    • Anything necessary for survival or central to wellbeing.
  • Justified treats (I deserve it)
    • Restraint in some other areas allows for justifiable treats.
  • Put offs (I can live without it… for now!)
    • Something desired but not essential. Often big purchases that can afford to be delayed.
  • Luxuries (I desire it)
    • Strongly desired but never a necessity
    • It isn’t an exact science and it’s a dynamic playing field but knowing where you sit with your main consumer groups can help you shape an appropriate plan.


The thing to remember is that, throughout a downturn, all consumers re-evaluate their priorities.

It’s your ability, as an experienced marketer, to understand them well enough to predict their behaviour change – what shifts will they make and why?

Essentials Justified treat Putt offs Luxuries
Stop everything Switch to ownable and cheaper options Reduce or stop Stop Stop
Belt tightening Seek out the favourites and hunt for deals Cut back where they can and focus on little wins that deliver Delay, negotiate harder consider options Predominantly stop
Low profilers Little or no change More selective with overt luxury Look to use the situation to negotiate and drive costs down May reduce the more conspicuous displays of wealth
Live for today Little or no change No change Will buy if there is a deal, they can’t ignore Will not necessarily try new things

How your brand behaves in bad times is far more critical than how it behaves when all is rosy.

Treat this (and any future) turbulence as an opportunity to reignite with your loyal consumer base. Understand them, follow their behaviour, predict the change. This is your chance to show your consumers what you stand for and how it relates to them and their needs.

At the end of the day, if you still need to trim some costs, be methodical about it. Use these general principles as a starting point:

1. Look after your core

  • If you don’t remember anything else you must remember this. Look to your brand loyalists, they are the ones most likely to see you through the downturn and how you behave now can help build love for the long term.

2. Time to clean house

  • If you have brands on life support, it’s time to turn off the machine. Support your heroes and give them the best chance to flourish.

3. Keep a steady course

  • Don’t panic and alter a brand’s fundamental proposition or positioning. This is about staying focused, retaining what’s great and making sure this is the one thing consumers remember.

4. If you’ve got a war chest, this is the perfect time to use it

  • On average, increases in marketing spending during a recession have boosted financial performance throughout the year following the recession.
    And if you think you can’t afford it, think again – you’ll probably get it at a reduced cost

5. Invest in market research

  • We’ve covered why it’s important to know your consumers and predict their behaviour, so do it… now.

6. Adjust your budget allocations to suit.

  • You’ll no-doubt be under scrutiny to show return on your investments, so use it wisely. Consider moving budget from broadcast media to programs with more measurable results, such as DM, online or in-store.

Got all that? OK, great! If not, remember:
– Be agile
– Protect your loyalists
– Understand your audience – who they are, what they’re feeling and what might change
– Reinforce an emotional connection between your brand and consumers by demonstrating empathy
– Streamline and optimise product portfolios
– Invest wisely
– And most importantly – Be ready for the recovery

This downturn won’t last forever and when we’re through the woods, consumer behaviour might revert, or it might change forever. Are you ready?

Thanks for reading this latest thought piece. As always, if you have any questions, or just want to chat, don’t hesitate to get in contact with us.