Severe economic downturns, like the one we’re experiencing now, create an enormous amount of uncertainty for financial institutions and other businesses. But many organizations respond to this uncertainty in predictable ways.
They’ll shelve long-term projects, focus on short-term needs, and cut spending on anything not deemed business-critical.
Right now, some banks and credit unions may consider cutting their advertising spend and pausing marketing efforts to preserve resources until the current economic crisis has passed. This mentality seems pragmatic, but it can be counterproductive to both short-term needs and long-term growth.
Economic recessions and periods of stagnation are defining moments for the marketplace. Moments of disruption can be the times when smaller players pull ahead of larger competitors.
Experience From Previous Crises
Citing a study of publicly traded companies’ performance during and after major downturns, Harvard Business Review found that businesses that gained an advantage over their competitors did a few things differently:
- They acted sooner
- They took the long view.
- They continued to focus on growth – not just cost-cutting.
During the Great Depression, working to build market share when others weren’t proved to be a turning point for a few brands, including breakfast cereal giant Kellogg’s. We still see the results of their successful approach in the breakfast aisle today.
More recently, brands like Lego, Amazon, and Netflix took a similarly growth-minded approach to emerge from the Great Recession even stronger.
From a marketing standpoint, it’s important to consider how you can use your advertising budget in a way that’s not simply reactive, but proactive.
While today’s uncertainty calls for careful strategy and smart spending, it is no time to simply hunker down and wait for risk-free opportunities to come your way. As other downturns have shown us, those who adapt and continue to connect with consumers will be better able to weather today’s storm, and better positioned to thrive when it’s over.
Lessons for Marketers
Here’s what your financial institution can do:
1. Be Visible
Consumers want a dependable banking partner. Simply being visible during an economic crisis is a reassuring sign of corporate stability, both for your current customers or members and for prospects seeking a more reliable financial institution.
2. Stay Top of Mind
Brands that cut or significantly reduce their marketing spend during a recession run the risk of being forgotten, and later they may have to “start over” in building brand awareness.
3. Broaden Your Audience
As bleak as the marketplace can appear, it may also provide opportunities for an enterprising financial brand to increase market share. As other financial institutions retreat, the right messaging, marketing channels, and offers can help you win new customers or members.
4. Speak to Changing Needs
While your marketing and outreach efforts should continue, your specific messaging will need to change course.
During hard times, a value proposition based on affordability, financial security, stability, and peace of mind may resonate better than more aspirational lifestyle messaging.
5. Identify New Opportunities
Product promotions should be aligned with the needs discussed in #4. Right now, mortgage refinancing and HELOCs may supply consumers with much needed monthly savings to help get them through. Premium offers on checking, savings, and CD options may be particularly attractive to consumers. So are non-branch conveniences such as fast online loan applications and a highly rated mobile banking app.
Is another bank permanently closing its branches in the communities you serve? This is your opportunity to win over the customers they’re leaving behind by demonstrating your local service and commitment to the community.
6. Work Efficiently
During a recession, taking a more aggressive approach to marketing and branding efforts may be the healthiest course of action for your bank or credit union – if this approach is supported by a carefully informed strategy and makes efficient use of your advertising budget.
Coordinating closely with other departments and decision-makers, having clearly defined goals, and working with an experienced creative team are key to speeding up projects and cutting ad spend.
An Agency Relationship You Can Depend On
LIGHTSTREAM is ready to help your financial institution accomplish more with its marketing budget, so you can better adapt to these challenging times. Turn to us for a full range of cost-effective traditional and digital marketing services, a streamlined process, and deep financial marketing expertise. Contact us to learn more.