Shopify Ecosystem

Recession: Best Time For Small Brands To Scale & Take Over Competition


History and past data

Before the Great Depression (one of the biggest economic downturns ever), there were two leading ready-to-eat cereal brands: Post and Kellog.

Post was the undisputed market leader in the industry heading into the recession. But when the economy took a nosedive, they cut way back on their marketing to save on expenses. Little did they know, the opportunity cost would set them back greatly later on.

Meanwhile, Kellog’s introduced a new product called Rice Crispies and even doubled their ad spend. During that time, this was seen as an illogical move since it looked quite futile to push your products to consumers pinching pennies. 

After the recession, Kellog’s profits grew by 30% and emerged as the no.1 brand. While Post’s sales plummeted and gave up its position in the market.

A Century of Proof
Source: Advertising Specialty Institute

Time and time again, history has shown that not cutting back (or even doubling) your marketing during recessions can help you scale your business massively. And decade’s worth of data agrees with it too.

In a study conducted by McGraw-Hill, they analyzed 600 B2B companies and discovered that the companies that maintained advertising during a recession grew their sales by 275% over those that didn’t.

There’s also a MarketSense study that shows brands like Kraft Salad Dressing and Jif scaling their sales by 70% and 57% due to scaling their marketing even during the 90s recession.

A Century of Proof
Source: Advertising Specialty Institute

Less competitor ads, more of yours

As the Warren Buffet saying goes: “Be greedy when others are fearful and be fearful when others are greedy”

Times like these are when most of your competitors are fearful and cutting back on their marketing, causing consumers to see less of them. The market is less saturated with ads which is the perfect opportunity for your brand to get noticed.

Not just that, but since you didn’t stop marketing in a time when businesses “vanished”….once the recession ends, your business will be remembered the most and can position itself as the no.1 brand.

There are also slight budget benefits when advertising during times of recession. With fewer competitors bidding on ads, your cost-per-acquisition becomes cheaper. This means the usual budget you allot can now potentially acquire more customers as compared to pre-recession times. 

Of course, marketing in a recession will only be beneficial if it is done right. This means putting the right message and offer, in front of the right audience, at the right TIME.

If you want an extra pair of eyes to guide you and make sure your digital marketing produces results during uncertain times like these, you can talk to one of our experts at Dash Activate Online. You can schedule a FREE call here: https://dashactivateonline.netWe’ll share with you how we continue to scale 7-figure businesses and take over their competitors even during a recession. 

Special thanks to our friends at Recart for their insights on this topic.
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