When consumers are hit by economic shocks, brands can refocus on emotional connection
In times of economic upheaval, brands need to change and adapt. Economic shocks can mean recession, lower consumer confidence, and reduced discretionary spending as the cost of living soars. Such crises are precisely when the emotional side of brands comes to the fore, taking precedence over rational price considerations. The aim should be maintaining relevance through hard times. This hinges on brands’ ability to cultivate crucial emotional bonds: building and maintaining strong relationships that sustain consumer loyalty.
One of the most effective strategies is to focus on how brand-led activities can deliver relief and respite from the challenges that customers face – offering small moments of joy in dark times. Take two famous examples.
In 1931, Coca-Cola faced the Great Depression, yet still wanted to grow. The company turned to Haddon Sundblom, a talented commercial artist, to create a lovable Santa figure. His vision created a unique emotional engagement with customers that endures to this day, while implying that people could add to their enjoyment of Christmas for the minor expense of a Coke.
Next, consider the example of Charles Revson, an executive at a US cosmetics firm who left his job in 1932, believing he could do better. With $300 in capital, he teamed up with his brother Joseph and chemist Charles Lachman to start Revlon – the “L” being a nod to Lachman. Their original nail polishes were thick, smooth, and offered more colors than any competitor. They were also given exotic names, such as Fire and Ice, Plum Lightning, or Moon Drops. Revson rightly believed that although many women were cutting back on overall household spending, they would still be open to a small, inexpensive treat – a moment of pleasure in hard times.
Given the importance of emotional connection, it can serve brands well to maintain advertising spend during tough periods – even when marketing budgets come under pressure. Yet brands cannot focus only on the emotional dimension; there are numerous other functional approaches to growing, or at least maintaining, your brand during a recession. Depending on your starting position and relative strength, an obvious first move is to squeeze suppliers, making them – not the consumer – carry the burden of cost increases. This is a strategy widely used by retailers.
Another option is to increase the number of discounts, promotions or bundled packages on offer, to maintain or increase purchases of your brand and stop consumers switching to cheaper rivals. Increase emphasis on digital media is also likely to make sense: costs for social media, content marketing and email campaigns are typically lower than those of traditional media.
A final strategic option worth noting is “shrinkflation” – an often unannounced reduction in the size or weight of a product without a corresponding reduction in price. This is risky, however. It relies on consumers not knowing exactly what they are paying for. This strategy has been so widely used in recent years that consumers are increasingly alert to it – and annoyed by companies that attempt it.
For any brand leader, understanding how economic shocks and market upheaval affect your customers is critical. It pays to consider not only the functional necessities of riding out a crisis – but the opportunities to reinforce emotional connections, too.
Giles Lury is an independent brand consultant and writer
