Doing more with less: Six marketing lessons from previous recessions
First published on WARC
Reviewing the most effective campaigns from the last recession provides lessons on how brands can create value perceptions during difficult economic times
Lessons are gleaned from brands such as Tesco, Virgin Atlantic, Heinz, Guinness and Hyundai.
Why it matters
With budgets under pressure, and consumers feeling the pinch, creativity can offer brands that last unfair advantage, helping them to win market share and grow during tough economic times.
Reframe existing value – the highly successful M&S (‘Dine in For Two’) and Sainsbury’s (‘Feed your family for a Fiver’) campaigns were borne out of the last recession.
Create certainty – create psychological value through certainty, by offering things like price guarantees.
Create valuable moments – position products or services as an affordable luxury that can lift morale and make people feel good.
Highlight quality – Waitrose used this in 2009 with its “Essentials” own label brand. Rather than focusing only on price it focused on the quality of the products instead.
Stress heritage – When value is under scrutiny, consumers want good quality and to make sound choices. Reinforcing brand heritage can reassure customers.
Reinforce distinctiveness – With tight marketing budgets and competition from discounters and private labels it’s important to focus on your core offering. Reinforce what makes your brand different through salient advertising that refreshes existing memory structures.
British households are facing the biggest financial crisis for a generation. Inflation is outstripping wages, hitting a forty year high of 11.1% (CPI, November 2022), resulting in the biggest drop in living standards since records began (OBR).
It’s little wonder then that value is coming under sharp scrutiny and people are switching, down-trading, delaying and stopping purchases in levels that haven’t been seen since the Financial Crisis of 2008. In this climate, it’s never been more important for brands to be financially competitive, but most companies are also facing a cost of doing business crisis that is driving up costs and prices. So, how can brands survive and thrive in an ever more competitive value battleground when cutting prices isn’t an option?
The answer is simple, when you can’t compete on price you need to compete on brand and it’s up to marketers and agencies to create value perceptions and reduce price sensitivity to protect businesses. This is no small task, but like many things in life the past can act as a guide, so I’ve delved into the most effective campaigns from the last recession to find six proven ways that brands can create value perceptions during difficult economic times:
- Reframe existing value
- Create certainty
- Create valuable moments
- Highlight quality
- Stress heritage
- Reinforce distinctiveness
1. Reframe existing value: Perspective is everything
Perhaps the most well known technique, price reframing increases value perceptions by changing how consumers assess your value, often by changing the ‘comparative set’ or ‘anchor point’ that your brand is marked against.
M&S and Sainsbury’s used this technique to great success in the last recession, through their famous ‘Dine in For Two’ and ‘Feed your family for a Fiver’ campaigns. M&S, a high end food brand, reframed their value by comparing their £10 meal deal to dining out in a restaurant rather than discount competitors like Aldi, significantly boosting value perceptions. The IPA Effectiveness Gold winning Sainsbury’s campaign reframed their value by anchoring consumers to a £5 price point that was significantly below the £6-12 average estimated cost by consumers.
In the current climate, this technique is already being widely used by brands across the globe, from Tesco’s genius ‘Clubcard prices’ which makes themselves their own point of value comparison, to a recent YouTube campaign in America which uses the cost of subscription TV to reframe the cost of YouTube TV – ‘get more than cable for less than cable’.
2. Create certainty: Make it feel less risky
When money is tight, depleting resources via purchases can feel like a ‘risk’ and as such consumers want to feel like they’re making safe, smart choices. This can be seen by increased use of price comparison sites, shopping around and consumers choosing to cut back on expensive consumer durable goods (that old sofa isn’t that uncomfortable after all).
One of the most effective ways to create added value for consumers is to create psychological value through certainty, such as price guarantees that short-cut comparisons, satisfaction guarantees that derisk purchases and novel product innovations that offer people greater control and clarity over their spending.
In 2009, car manufacturers were facing decreased demand because consumers worried about the threat of unemployment. So in an Effie winning campaign, Hyundai launched a new ‘Assurance’ program offering buyers of new cars a guarantee that the company would buy back its vehicle up to a year after purchase if the customer lost their job in that timeframe. This psychological safety net helped to derisk the purchase, and Hyundai increased sales 11% YOY in the first two months of 2009, a period in which all competitors were significantly down between 32%-50% YOY.
British Gas had similar success in 2009 in their IPA Effectiveness Gold winning campaign introducing energy meters. Knowing their customers resented paying extra through estimated bills, British Gas introduced a new “EnergySmart” proposition that helped customers submit more frequent meter readings, giving them the peace of mind that they only paid for the energy they used, avoiding overpaying and having to reclaim money.
Creating certainty can be done through proposition innovation, but it can also be created more cost effectively by finding a ‘Rembrandt in the attic’ and repurposing an existing proposition. Tesco, and subsequently Sainsbury’s, have done this recently to good effect by pivoting their scan and shop propositions from the convenience of a speedy shop to the certainty of avoiding bill shock, creating psychological value by helping customers to stay in control of their spending and avoid social embarrassment.
3. Create valuable moments: Everyone needs a little pick-me-up
While most households reduce spending during economic crises, in every downturn there are some spending categories that actually increase. The ‘lipstick effect’, was a term coined by Leonard Lauder at the beginning of 2001 when he observed that lipstick sales tend to be inversely correlated to economic health. While the “lipstick” effect was debunked when the trend ended during the 2008 crisis, the idea of some affordable luxury items doing well during economic crises holds true.
Brands can tap into the ‘lipstick effect’ by positioning their products or services as an affordable luxury that can lift morale and make people feel good. This is something that Cadbury recognised in the last recession with their IPA Effectiveness Silver winning campaign ‘Glass and a Half Full Productions’. This highly creative, brand campaign included fun and irreverent ads like ‘Gorilla’, ‘Eyebrows’ and ‘Trucks’ looking to create associations of Cadbury as producer of joy. The whole campaign delivered a payback that was 171% higher than previous campaigns, with ‘Gorilla’ alone delivering an ROI of £4.88 for every £1 spent.
More recently, Dunelm have also tapped into ‘the lipstick effect’ with their insightful ‘Wits End’ campaign. Home and furniture brands are facing significant pressure from reduced consumer spending, so to combat this Dunelm have created a campaign which reframes their products, contrasting the seemingly endless treadmill of doom and gloom that characterises contemporary life with their products which are positioned as affordable, mood boosting treats that are ‘little ways to make home DunYourWay’.
4. Stress quality: ‘Price is what you pay, value is what you get’
When you’re unable to compete on price alone, quality becomes one of the most important value leavers for justifying a premium and tipping the value scales in your favour. While most consumers become more price sensitive during recessions, quality is still an important consideration as people can’t afford to waste their money.
Reminding customers of the quality and longevity of your products can be particularly successful for premium brands, especially when this quality is contrasted against a reasonable price point. This price point doesn’t necessarily need to be that competitive either, as long as it sits within the ballpark of an acceptable price, after all no-one carries a list of prices around in their head.
This technique is something that Waitrose used to great effect in 2009 when they rebranded their own label ranges under one “Essentials” brand. Rather than focusing only on price (something which they couldn’t compete with cheaper rivals) their IPA Effectiveness Gold winning campaign focused on the quality of their products instead. Through the introduction of 1,200 own label products under “Essential Waitrose”, the retailer ended 2009 as the UK’s fastest growing supermarket.
The quality-led value equation has been a staple for John Lewis & Partners, whose Autumn campaign, used a ‘good’, ‘better’, ‘best’ strategy to stress how they had ‘quality at every price’.
5. Stress heritage: Strong and stable
When value is under scrutiny, consumers want good quality and want to make safe choices. One way to reassure customers about both, popular during the last recession, is to reinforce the heritage of your brand. Heritage shows you’ve got staying power, signalling that your brand has weathered economic storms before, giving the impression that you’re trustworthy and less likely to go bust, removing some risk for consumers.
In 2009, Virgin Atlantic celebrated its 25th anniversary in style by going back to the 1980s in their campaign. The ad stressed their heritage and leveraged their distinctive “red hot” tone to beat British Airways for spontaneous brand awareness and win a hatful of creative and effectiveness awards, including Marketing Society Gold.
Another award winning campaign came from Hovis, who went even further back in time, 122 years in fact, to stress their heritage with an IPA Gold winning campaign that saw a 14% YOY increase in sales after two years of more or less continuous decline and made Hovis Britain’s fastest growing FMCG brand of 2009.
Faced with the challenges of streaming services and increased political scrutiny over value for tax-payer money the BBC utilised their heritage in their recent ‘this is our BBC’ campaign which spliced together footage over the decades to create an engaging manifesto highlighting the Beeb’s breadth and impact on British society.
But heritage doesn’t just have to be retrospective, in their battle with craft beer Greene King used their heritage to launch two new products, Flint Eye and Level Head, with a neon-inspired video around the thought of ‘brand new beers, centuries in the making’.
6. Reinforce distinctiveness: Get back to basics
As the ‘Long and The Short of It’ has shown, investing in brand building communications is a far better strategy for reducing price sensitivity than short term promotions. On average price sensitivity decreases as the number of brand metrics improve, while fame driving campaigns are particularly impactful in reducing price sensitivity.
In the absence of new propositions that can create value reappraisal, focusing on building your brand by reinforcing your distinctive assets is a smart choice. With tight marketing budgets and competition from below (discounters, private labels) it’s important to focus on your core offering, reinforcing what makes your brand different through salient advertising that refreshes existing memory structures.
In the first quarter of 2009, Heinz were losing share to own label brands in all categories. Heinz understood that many consumers regretted their decision to down-trade and created the ‘It has to be Heinz’ campaign focused on their four core products (salad cream, ketchup, tomato soup and baked beans) rather than niche or new products. The adverts emphasised Heinz’s taste superiority and reinforced their highly distinctive brand assets. The campaign resulted in Heinz becoming the fastest growing of the ‘Top 10 manufacturers’; delivering over £12m in incremental revenue, and earning an IPA Effectiveness Silver.
Similarly, when Guinness needed to create one global brand strategy in 2011 they decided to focus on what made Guinness distinctive (its signature pour, dark colour and bold flavours) creating the “made of more” platform. This platform and the ads that came off it were a wild success, delivering one of the strongest ROMI that Guinness has ever seen.
This distinctiveness-led approach is key for all brand building, but seems particularly vital for FMCG brands which have to work particularly hard to justify their price premium in the face of own brand alternatives. It’s telling that Napolina (who have 140 products) chose to focus their recent campaign around their most recognisable product (chopped tomatoes) with a witty campaign that not only stresses quality but is also beautifully branded.
Never let a good crisis go to waste
The cost-of-living crisis and accompanying recession is putting value for money under the microscope, both for people choosing products and for brands having to justify their marketing spend. While budgets will invariably come under pressure, creativity can offer brand’s that last unfair advantage, helping them not only to survive but to win market share and grow. It’s up to us to rediscover that underlying principle of advertising, to make our brand seem more valuable than the rest.
Written by Matt Shaw, Senior Strategist at The&Partnership.