6 Recession Strategies For B2B Brands

Corien KersheyAugust 30, 20195 min

All the signs seem to point to a looming recession. Of course, recessions are almost always driven by emotional angst, and with every nervous sell-off or panicky tweet we set our course more firmly. Humans are nothing if not herd animals.

How we cope with recessions also tends to reflect our pack mentality, sometimes to the detriment of brands. A good example of this is the B2B sector, particularly the high-tech sector, where I racked up many of my branding and marketing scars, a well-lit stage for observing herd thinking and its outcomes.

Recessions have an enormous ability to shuffle the market deck, and the brand chessboard coming out of a recession often looks quite different from the board before it. During the two most recent major recessionary periods – the 2000 downturn and the 2008 Great Recession – those B2B brands that chose to follow given wisdom were more likely to come out of the recession at a disadvantage while those who saw the brand potential of a recession tended to come out in a much stronger position.

Well Funded Brands Emerge As Winners

No one will argue that recessions are bad for sales and revenue, and the general thinking in B2B is to choke back spending on sales and tactical marketing, lower prices to encourage buying and pour everything into product development.

What often happens, though, is that at the same time, investment in the brand stops too, resulting in a low presence in the market. As well, pricing cuts and unclear positioning compound the problem, and the brand is in a much weaker position when the sun finally comes out.

Therein lies the potential advantage. Recessions cause marketplaces to go quiet, an opportunity for forward-thinking brands to invest in building awareness, telling stories, communicating unique value, and gaining greater reputation.

Recessions are also often long, and buyers are a forgetful bunch. Over the three to five years that a recession and recovery can take, the brands that are consistently present are top-of-mind when the economy rights itself.

As brands today eye the horizon for storm clouds, they should take stock of their current brand and marketing, and assess their opportunity to leverage a downturn by maintaining investment at a minimum or increasing investment at best.

 Successful Innovation Requires Awareness

Convention in B2B generally — and high-tech specifically — holds that during a recession, investment should be directed to engineering and product development.

The high-tech sector feels a significantly greater degree of pain during economic downturns for two reasons. First, it’s a B2B model and so feels the downstream pain of consumer loss of confidence to a much greater degree than do B2C markets. Think of it as an iceberg, with consumer firms the top 10% that you can see and the B2B firms the 90% hidden but keeping those consumer firms floating and upright.

Second, much of the value in many B2B firms is in its intellectual property, and so it seems to makes sense to increase value by investing in product development.

The downside is that even in presumably cold and logical B2B markets, those brands that are top of mind after the recession are those that have a distinct market advantage over those that peeled back on brand awareness and marketing. So, while conventional firms that spent only on product development have new IP as the economy recovers, those firms that also spent on brand building have market attention.

Now is the time for B2B firms to develop a balanced strategy for investment should the economy flounder. While continued product development is important, it should not be at the expense of brand awareness. Companies with high brand awareness and something to sell are far more likely to have a winning formula for market success later, while those with innovative new IP are more likely to be their acquisition targets.

The Recession Opportunity For B2B Brands

The tendency to cut back or even eliminate marketing during a recession is highly indicative of how marketing is viewed as a tactical overhead expense in B2B companies. It’s no surprise that those companies that straddle B2C and B2B – for example, many computer and electronics brands – dominate in their product categories in the B2B world. Even companies that are largely B2B but use the B2C brand playbook – for example, Hootsuite or HubSpot – dominate.

Sadly, though, for most B2B companies, marketing is about tradeshow booths, collateral and maybe some lead gen. Marketers need to up their strategic game and prove their value as revenue and profit generators, measurably demonstrating how marketing and brand investment drives customer acquisition.

A recession is a good time to take stock and plan for greater strategic value delivery:

  1. Great talent is more available during a recession. Use this time as an opportunity to let go of the deadwood and bring in fresh thinking.
  2. Look at the data you’re collecting and how you can take greater advantage of it by turning it into market and customer insights, and ultimately revenue and profit. It’s a great time also to talk to your customers and really understand what compels.
  3. Tighten your positioning. Take stock of the space that your brand occupies in the landscape and determine whether your unique value proposition is the one that will best drive success when the economy recovers.
  4. Develop a rock-solid measurement strategy. Marketing is often viewed as second-class in B2B because marketers do a poor job of measuring impact and ROI.
  5. Review your content strategy and delivery mechanisms. Informative content is vital to B2B buying processes, and yet the B2B market is remarkably poor at it. This is a great time to break out with a “pay attention!” content approach as firms use the quiet time to do research.
  6. Sit down with sales and rebuild your lead-to-profit cycle. From awareness to lead to close to profitable loyalty, this cycle connects the investment in marketing to a long-term profitable customer.

Although nobody likes a recession, they can be a welcome time of quiet that presents opportunity to companies that plan ahead with a strategy to build more brand awareness, balance investment across marketing and product development, and re-tool marketing to be more strategic and valuable as the economy recovers.

Contributed to Branding Strategy Insider by: Corien Kershey, Ph.D., Founder, Brand Clarity

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