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The cost of living crisis is one of the biggest challenges facing brands, businesses and organisations at the moment. With wallets feeling the pinch from a whole host of events, ranging from the war in Ukraine, climate-related supply chain disruptions, the Brexit hangover, and rising food inflation, people are making hard choices about how they’re spending their money.

For a lot of organisations, this means that incomes are down, and there’s pressure to cut costs. But which costs do you cut? Which areas still have fat left to trim? In this article specifically, we’re going to be taking a look at whether you could (or should) slash your advertising budget.

A lot of brands may be considering cutting down on marketing costs, but new research by the Institute for Practitioners in Advertising shows that companies who increase their marketing budgets in tough times come out with a competitive advantage when the economy bounces back. Investing in marketing now helps organisations stay in the public mind and justify the spend to doubting audiences. So let’s take a look at some of the best examples of brand building through a recession.

Helping hard-pressed customers is a sure-fire way to boost positive sentiment and focusing on what you can do for customers now will put you in good stead when conditions eventually improve later.

Contagious

Lending A Helping Hand

Some brands are launching campaigns to support those struggling to make ends meet. For example, Morrisons partnered with Heinz to offer customers free jacket potatoes with baked beans during the school holidays, simply by asking for "Henry". By focusing on addressing the shame people feel around handouts, the brand was able to support the communities they serve. The long-term benefit? Helping struggling customers is a great way to boost positive brand-association in the future.

The Charity Take: What initiatives are you rolling out to help your community and audiences deal with the cost of living crisis? With only one third of the British public believing that charities are effectively supporting people through the cost of living crunch, can you set yourself apart by launching a high-visibility, high-impact campaign designed to lend a helping hand?

Educating Through A Crisis

Other brands have chosen to go the educational way, by launching initiatives aimed at helping their customers make the most cost-effective choices. A great example of this type of marketing was launched by pasta brand Barilla, who launched a guide to passive cooking (aka, turning the stove off early-on in the pasta cooking process, letting it cook for longer, and saving on energy bills). Notably, Barilla’s initiative didn’t focus on promoting their own brand above other pasta-makers, but instead gave customers the tools they needed to be more energy efficient in the way they cook.

The Charity Take: Lending a helping hand doesn’t necessarily mean you have to spend a huge amount of resources and budget on delivering support to a community. Is there a way in which you can connect both your existing and new audiences to your cause by educating them through the cost of living crisis?

Discount Without Devaluing

Often, brands worry that pushing discounts too frequently will devalue their brand, or train their customers to wait until there’s an offer on before buying. So how do you offer discounts without devaluing your image? McDonalds’ recent campaign in Sweden used a gamified strategy to reframe a discount as a reward to earn. They encouraged their customers to travel back in time on Google Street View to find old McDonald’s promotions and claim them back on their app.

The Charity Take: Beyond the applications to your retail offer, how could you apply this insight to your donors? Consider adopting a flexible giving strategy, allowing your supporters to pause their donations and finding new ways to keep them engaged.

Stand By Your Price

Or maybe you can’t justify offering discounts, either because your own costs are rising too quickly or because it simply doesn’t fit your brand or organisation. So how do you convince your audience that your full price is worth it anyways? Ecuadorian salt brand Cris-Sal has struggled with this question in the past, fending off cheaper competitors and lagging customer loyalty. How did they bounce back? They started investing in their marketing budget, doubling down on an aggressive marketing strategy to make their brand so salient it couldn’t be ignored.

The Charity Take: This applies to both a retail offer (maybe discounts don’t fit into your current pricing strategy) and donations (offering discounts on donations isn’t exactly a common strategy). How are you investing in brand salience to justify the spend to your audiences anyways?

Turning A Non-Essential Essential

But there’s a limit to how much you can do with brand building. Brand loyalty means a lot, but what happens when customers are cutting your (potentially non-essential) spend out entirely? Here, we can learn something from the liquor market, which sees spending drop during and after recessions. Bailey’s, which saw a whopping 17% decline after the 2008 financial crash, used their customer research to reframe their product as an ingredient for everyday meals and cocktails through short, snappy, and most importantly, frequent video marketing. Remind your audiences that you have a place in their lives regardless of the cost of living crisis.

The Charity Take: When it comes to cutting costs, unfortunately, it may mean that consumers are less likely to give to charity as they prioritise making their own ends meet. How are you reframing your messaging to communicate just how essential the services and support that you offer are?

For the full analysis, check out Contagious’ article about responding to the cost of living crisis here.