Before we embark on the path to recession resistant marketing, we’ll set the stage with a framework that you can use to guide you marketing decisions, budget discussions and recessionary marketing strategy. Based on leading research from McKinsey & Company, AdAge and other thought leaders, this playbook will serve as your roadmap through the rest of the day.

1. The New Playbook for
Marketing in a Recession
January 27th, 2009

2. The old playbook…
“…build a recession “…response to the
 
marketing plan based recession varies by
on the firm’s strategic geography, sector and
capabilities” firm size”

3. The new playbook
There is no panacea

Strong firms benefit from investment and suffer from

cost cutting
Proactive marketing is not always a guarantee of

success
Firm’s viewpoint on the recession determines strategy

“How an organization perceives a change in the

environment affects the level and type of response”
Focusing on historically profitable regions and

customer groups will miss the mark

4. Four prescriptions for managing through an
economic recession
Prescription Explanation Effect
To conserve resources
Position the firm in multiple Sales are imperfectly correlated Creates a balancing effect on cash
markets and geographies. across regions and industries. flow.
Plan for the contingency of Recessions are hard to forecast; Facilitates a swift response to
sharply declining sales. sales declines are a leading recession.
indicator.
To attract resources
Promote the business in tough Customers often rethink supplier Makes new customer inroads.
times. relationships during tough times.
Prepare to exploit the recovery When competitors are conserving Adds capacity or customers at a
with careful investments. cash, desirable hires, capital assets, discount.
and even companies may become
available.

5. One way of looking at things…
Corporation
Conversation Customer
Competition

6. Recession marketing framework

7. Internal Branding and Morale
Employee issues are critically important during

recessions and in preparation for recovery
Constant communications has been proven to sustain

high morale and maintain company strength
For Example: Black and Decker increases communications during times of recession in
order to maintain morale and credibility among their employees.
• The company alerts employees to changes in their respective departments
• They communicate up front what the managers see as areas for potential reductions in
employment or financial support
• Black and Decker continues its investment in organizational development
• The company philosophy is to promote employees from within, even during a recession.

8. Multiple markets and geographies
Examine your customer base for cycles &

counter cycles and prepare to shift focus
 Examine regions, or even parts of the
city/state/county that have performance
differentials
 Identify customers less affected by recession
 Who needs your help the most in the recession?
 Could you do more business virtually, not
dependent on local geography?

9. Micromarket to profitable segments
Consumer marketers with access to micromarket

data have even more opportunities to enhance
profitability.
One beverage company recently conducted surveys that

identified staggering differences in the potential profitability of
customers within individual markets and micromarkets. A
company can maximize its profitability by focusing on
micromarkets less sensitive to prices while also offering discounts
or preferential pricing elsewhere to drive sales volumes.

10. Micromarket to profitable segments

11. Plan to confront declining sales
Ear to the ground, “CRM mentality”

Don’t believe that economists (3/01 – 90% said “no

recession)
Get comfortable with the data – it’s all about the

data!
Setup trigger points at which you invoke different

parts of your recession marketing plan
For Example: In 2001, ADC communications, a competitor to Lucent, Cisco and Nortel
saw it’s sales degrading to the point of a 27% dip. The immediately retrenched, changed
course, implemented a recession marketing & sales strategy and gained market share on
each of their major competitors that they retain to this day.

12. Promote products & services
Don’t be tempted to abandon planned initiatives

Supplier switching activity peaks during recessions!

Cheap advertising = higher ROMI

Your best prospects are your competitors best

customers
For Example: Dixieline Lumber, a 10-unit San Diego chain, two marketing initiatives
helped increase company sales by 9% during the recession of 2001.
1) The first was directed to the building trade and involved training the in-store sales
force to assemble hardware packages for custom-home builders.
2) The second initiative was directed at homeowners and involved increasing marketing
on millwork as homeowners switched from spending on traveling and entertainment
to fixing up their homes.

13. Maintain advertising & marketing
All data points to higher post-recession market

share for sustained or increased investment
Confidence is built through sustained successful

efforts
Mix in new marketing vehicles to maintain reach but

reduce cost
Steady marketing sustains brand awareness and

position with consumers
For Example: Carpet Mills of America increased its sales by 24.4% during the recession
of 2001 simply by sustaining their overall marketing efforts while their competitors
shuttered their marketing.

14. Introduce new products & services
Historically, some of the best innovations come from

recessions
Less noise and clutter means more room for you

(increase SOV & SOM)
Innovations are proven to keep customers buying in

times that are otherwise slow
For Example: There are two examples of great interest:
1) Paychex, an payroll processor, launched Taxpay in 1990 as an additional service for
it’s existing customers on Paychex. It brought in a burst of new revenues from
existing customers while introduced new customers to both Taxpay and Paychex,
setting itself up nicely for the recovery
2) Black & Decker introduced a highly successful line of 33 new power tools during the
1990 recession that set it up to capitalized on the DIY boom of the next decade.

15. Find price cut alternatives
Don’t send unintentional messages training your

customers to buy on discount only
Bundling, repackaging, white labeling, adding

service elements to products, tiered offerings and a
host of other mechanisms can sustain profitability
without entering a price war.
For Example: Grocery stores, department stores and other retailers often seek to raise
the profile of their own labels during recessions, often rebranding things to give them
broader appeal while increasing their profitability.
Microsoft and others have always sold a ‘bundled’ set of products that offers value while
maximizing profitability. Offer packages, include service offerings and seek out
customer input on what will provide the most value to them.

16. Attract new customers
Now’s a great time to get deep profiles of your

best customers (“Vertizontal”)
Focus on solutions – deep understanding of

customers includes deep understanding of their
needs, problems, pain points & desires
Maintain marketing presence as a show of strength

Capitalize on competitors pullbacks by

approaching their customers
Employ new marketing tools & channels to attract

customers from new media

17. Reprioritize marketing vehicles
Reevaluate the

effectiveness of current
vehicles
Shift 10-15% into new

media
Conduct a marketing

audit, don’t just do
guesswork

18. Reprioritize customer segments
Analyze customer segments for profitability to

determine shifts
B2B should examine risk on a per-customer basis

Watch where the trends are going

Setup tiers of customer segmentation

 Core
 Secondary
 Opportunity
 Harvest

19. Prepare for economic recovery
Typical recessions are 6mos – 2 years … Prepare

your plans for a 2 year horizon
Look for bargain acquisitions, leases, employees,

whatever you need to be successful on the upswing
Marketplace protection moves rapidly to

marketplace expansion
You’ll be flush with cash from the new customers

acquired in the downturn, ready to expand into the
recovery

20. Recession marketing framework

21. The New Playbook for Marketing in a Recession
Q&A
Need help after the presentation? Email dana@marketingsavant.com