In a recession, some firms slash marketing, while others see an opportunity to engage existing customers and attract new ones. The authors of a paper entitled “Turning adversity into advantage: Does proactive marketing during a recession pay off?”1 say the answer for many firms is simply “yes.”

The paper cites several successful examples, such as Proctor & Gamble pushing Ivory soap during the Great Depression, Intel launching “Intel Inside” during the 1990–91 recession, and Wal-Mart scooping the competition with “Every Day Low Prices” amidst the dot-com bust.

The researchers also dug into news stories that have portrayed companies such as Dell, Microsoft, De Beers, and BMW as capitalizing on a recessionary environment with aggressive marketing programs. Although most of these stories stressed the advantages firms have realized during the post-recession recovery, the authors say there are also immediate gains to be had.

Here are some key findings:

Be entrepreneurial. The most successful firms have an entrepreneurial culture that views marketing as an investment that directly drives long-term revenue growth.

Know your customer. Firms like Amazon that strive to understand their customers and address their most relevant interests stand to earn the strongest returns on recession marketing.

Invest aggressively. When other firms are cutting back, those who invest aggressively in marketing reach more prospects and send a reassuring signal of confidence to customers who may be ready to switch from weaker firms.

Our view
Financial services brands are based on trust, and that trust has been tarnished. In this environment, we believe there can be a tangible return on investment for firms that proactively communicate their strength and integrity to clients and prospects. //

¹ Srinivasan, Raji, Arvind Rangaswamy, and Gary L. Lilien. “Turning adversity into advantage: Does proactive marketing during a recession pay off?” International Journal of Research in Marketing 22 (2005), 109–125.