Ritson on Recession: 5 Takeaways for Marketers
In an industry where there are numerous self-appointed “gurus”, Mark Ritson’s deep knowledge and no-bullshit advice have turned him into one of marketing’s most respected voices. It’s always a pleasure to have him on a webinar even when the topic isn’t a cheerful one.
Yes, the UK is heading into recession again, this time with an unpleasant side order of inflation too. The Bank of England is predicting the longest recession ever, and consumer confidence is lower than it was during the first year of COVID. The US is also headed for a recession, though it is expected to be milder than in Europe. So, what’s a marketer to do?
There’s a risk of being too bullish about recession. “Roaring Out of Recession”, the HBR article Mark quotes in the webinar, reveals only 9% of firms successfully emerge from a recession and grow. It’s never easy. But thanks to bodies of marketing science work by the likes of Peter Field, Les Binet and the Ehrenberg-Bass Institute, the basic playbook is established.
Investment in marketing is essential during a recession because the overall market is shrinking. So even maintaining an investment means you’ll be growing your share of voice faster – and that will in time pay off with growth.
But for CMOs, knowing the right plays and being allowed to execute them are very different things. Ritson’s conversation with System1’s Jon Evans and Orlando Wood went beyond the basic theory to ask the question CMOs are really asking. How the hell do you get the business to sign off maintained or increased spend when everyone else is screaming for cutbacks?
Here are 5 takeaways for marketers to frame the conversations, win the arguments and help steer a business through hard times.
Remember you represent the customer
Marketers have plenty to lose in a recession – but it’s also the moment the business looks to them most. Fifty-nine per cent of companies expect the CMO to increase their influence in a crisis. Why? As Ritson reminds us, the job of the CMO is market orientation. They’re the one who has to understand what customers are facing, how they’re feeling and what they’re doing about it. And then make sure the organisation understands those changes. Your board members aren’t at the sharp end of recession, but your customers are.
“In a recession, your first job is to take the temperature of the market and feed that back into the organization. Your second job is to revisit your marketing strategy.” – Mark Ritson
(Of course customer understanding isn’t a magic gift marketers possess. As Mark points out, you’ll need good, up-to-date research and the skills to communicate it.)
Don’t think recession, think recovery
For some brands, just surviving the recession will be top of mind. But for bigger brands, a recession is all about preparing for the recovery. That’s the point of the HBR “Roaring Out of Recession” article Mark cites. The brands who do well from a recession aren’t the ones who simply make cuts. It’s the brands who find efficiencies in operational areas and invest that outperform in the recovery.
Marketing should be a big part of this investment. As we said earlier, maintaining investment on share of voice gives you an advantage during the recession. But because long-term, consistent communications are the most effective kind for brand growth, the real advantage of keeping investment up comes after. Brands that ‘go dark’ – switching off marketing in a crisis – take time to light up again when the recovery comes. While they’re reintroducing themselves to audiences, you have the chance to race ahead.
You can’t make the case by looking inward
The Great Recession of 2008 was also the Great Learning Opportunity for marketing science and marketers. There’s been an explosion in knowledge, evidence and empirical data on what marketers can do in recessions and what works best. That’s in addition to 100 years’ worth of earlier data on recession marketing. This stuff isn’t written by self-interested marketers looking for industry awards. The best-regarded analysts in the industry have worked extensively on the topic, and so have economists, social scientists and business thought leaders.
And yet one of the most common mistakes CMOs make, according to Mark Ritson, is to turn inwards for inspiration and look only at the internal numbers and data to set their activity in a downturn and make the case for investment. This is despite the fact that the huge body of external evidence is a lot more persuasive to CFOs and board members.
Yes, every business – and every recession – is subtly different. But don’t kid yourselves. Your situation isn’t so unique that you can simply ignore decades of evidence on what works across industries.
You have a role in pricing – grab it
The distinctive feature of our imminent recession is that a slide in growth is coinciding with a surge in inflation. These two things aren’t meant to go together, but they are. That means price is suddenly even more important. Your prices will be going up. How much, why, and on what become critical questions.
Marketers include price as one of their “4 Ps”. But as Ritson points out, most CMOs have very little – if any – say over it. There is a truly vital role marketers can play, though. Pricing isn’t just about setting the price and juggling the numbers. It’s about the research that goes into that price – including on consumer perceptions of value. As Ritson says, “The way we communicate and frame the price is far more important than the price itself. For that, we need marketers involved.” Being honest with your customers about price rises, why they happen, and what isn’t changing is a huge part of limiting the impact of those rises.
Move forward by looking back
We’ve talked about pricing, evidence, framing the internal arguments and more. But don’t worry, on the webinar we do talk about advertising too – with the help of Orlando Wood.
Orlando gave us a little history lesson, telling us about a moment in living memory when an energy crisis, inflation, industrial unrest and recession stalked the UK. Not 2022 but 1973, the year of Hovis’ classic “Boy On A Bike”. Hovis remade its ad in 2019 and it still tests extremely well, landing a 4.9-Star score in our Test Your Ad system.
The Hovis ad was deliberately nostalgic, designed to evoke warmer and happier times in the midst of economic difficulty. It’s an approach which works well, with cultural references and evocations of other times and places proving especially effective at boosting attention and emotional response. Repurposing older creative can be efficient and effective – and help set the right tone for an audience in difficult times.
Recessions should never be celebrated – they bring crippling human costs alongside economic ones. But nor should they be a source of dread for CMOs. Marketers know what to do, and they know what works. The playbook is already written. What’s needed is the conviction, strong arguments and hard graft to make it work.
As the late great Formula 1 driver Ayrton Senna said, “You cannot overtake 15 cars in sunny weather…but you can when it’s raining.” Similar to how a wet racetrack separates the exceptional drivers from those who are merely blessed with a fast car, recessions often create a clear demarcation between strong, well-managed brands and the chasing pack. With Ritson’s advice, marketers can take the wheel with confidence during the storm and lead their brands to sunnier days.
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