Why marketers must rewire their hardwiring
Benedict Buckland, Chief Creative Officer at alan. examines how marketers can help brands adapt their approaches to ensure they survive the current economic crisis.
“Keep calm and carry-on spending.” The sentence every brand marketer wants to hear, but not one that always easily passes the lips of a chief financial officer anxiously looking at the bottom line.
But it turns out it’s not their fault. When times are hard, we humans are simply hardwired to focus on the now and not the future. Turns out that all the esteemed articles and data on the importance of investing in long-term brand building in recessionary times might not be worth the (digital) paper they are written on. Our brains are wired for the sugar rush of the now over longer-term reward-delayed gratification.
The evidence is all there that brands which double down on their marketing spend during periods of uncertainty achieved more growth and sales than competitors. A study by McGraw Hill found that those businesses that continued to market during the recession in 1980 to 1985 saw 256% higher sales than their counterparts post-crisis.
And yet, whether you’re a business-to-business or business-to-consumer brand, marketing can be one of the hardest hit business functions during an economic downturn, particularly by businesses that see it as a cost centre rather than a revenue driver.
By focusing on the fundamentals and investing in the right areas, marketing can be the perfect tool to keep businesses afloat amid waves of uncertainty. Why are so many brands ignoring the evidence and still ditching – or excessively squeezing – their marketing budgets?
Human brains are hardwired to think in the present, which means we don’t necessarily make the right decisions when we are approaching periods of hardship.
‘Present Bias’ describes people who opt for an immediate reward rather than waiting for a bigger reward in the future. According to Hal Hershfield, a psychologist at the UCLA Anderson School of Management, we are hardwired to prioritise what we think is good for us ‘now’ rather than thinking about what might be good for us in the future – indeed, saving for the future feels like the neurological equivalent of giving money away to someone else entirely.
The same applies to businesses. The chaos of uncertainty generally leads to short-term (and sometimes poorly thought through) decision-making, focusing on the ‘now’ (short-term cash gains of, say, performance marketing) taking priority over playing the long game (investing in brand building).
The Covid-19 pandemic already taught a lot of brands how to adjust their marketing tactics during a crisis, and that even the worst of times don’t last forever.
Therefore, one of the best ways businesses can recession-proof their marketing strategies is to fight the hard-wiring head-on – adjust mindsets and then plan for the future. Below, I’ve outlined three ways businesses can do this successfully as we enter a recession.
Think brand and performance
Asos – one of the pioneers of online fashion – recently announced a loss before tax of £31.9m in its full-year results for 2022, down 118% on 2021’s. And according to new chief executive José Antonio Ramos Calamonte, this was due to “insufficient” brand investment and an over-reliance on promotions which resulted in a slowdown in customer acquisition.
More than 80% of the online fashion giant’s marketing investment was focused on performance marketing (the ‘now’) leaving insufficient spend focused on driving longer-term brand awareness. By underinvesting in brand, Asos lost its newness appeal – once one of its driving points of difference.
Asos will be pivoting towards a longer-term brand building approach. They have rewired their mindsets.
Stick to what you know
The biggest pitfall for businesses is straying away from what they’re good at. It’s easy to get distracted by the ‘new and shiny’, but this isn’t the time to be changing tactics drastically. Marketing strategies must be flexible, but ultimately businesses should keep to their niche and seek new ways within that to connect to their audiences.
Businesses need to show their value and worth to consumers in the ‘now’ but not at the expense of longer-term brand awareness which will keep businesses healthy in the future.
During a recession, expressions of generic sympathy aren’t going to cut it. Brands need to focus on two things: human truth and utility.
Brands need to first understand their audience on a nuanced, intimate level and then overlay this with the right creative thinking.
It’s not easy to look to the future when the present displays so many challenges but by re-wiring mindsets and trusting the evidence, businesses can have a healthy future.
Take a look at yourself. Take a look at your business. Ask yourself the provocative truth: am I doing this because I should or because I just can’t help myself?
Answer the question truthfully and the next steps will become clear.
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