Communication key to retaining customers during decline

"Essentially companies should be increasing their marketing budgets during times of crisis, in order to shore up potential customer numbers."

Raise awareness

Von Holdt says she started her business during a recession and now more than ever, brands and companies need to raise their awareness. "To be remembered, you must be accessible to the consumer, to ensure you don't lose market share."

She explains during a recession, many companies contemplate slashing their communication budgets, which will be to their disadvantage as they will "drop off the radar" of the media, their shareholders, their existing customers and potential customers.

"Public relations is one of the most cost efficient tools available. Advertising, while very effective, can be very expensive."

Inventive ideas needed

Von Holdt explains while the reality is marketing budgets will probably be cut, marketers need to think of better, more effective ways of spending their money and maximising their return on investment.

"This is when companies and brands need creativity in their approach," von Holdt says. "Merely cutting costs does not generate sales and usage. There are so many opportunities to reach the target audience and it does not need to be through the conventional way of advertising. Companies need to consider other avenues they may not have not explored before such as online marketing, to ensure they maintain a public presence."

Coca-Cola communication example

Von Holdt cites Coca-Cola as the perfect example: "Despite being one of the best known brands in the world they still continue to advertise, promote, publicise and maintain their brand image."

Communication with a brand's target audience must be maintained in tough times, with the cost of having built the brand to where it is, needing to be weighed against the cost of having to reinstate that brand when financial markets recover.

Remember recessions are a natural part of the economic cycle. The markets, the consumers and the products will still be around once the economy has corrected itself.

Broad reach of PR

"Public relations has a greater reach, not being bound by the same budgets and time that advertising is. It also offers a great credibility factor, as publications sell on headlines, not adverts."

While advertising and PR budgets are usually among the first to be cut, it doesn't always make sense, says von Holdt. "Credibility is a big factor, as is 'finding the customer' again. Be creative and keep communicating. Go lean, but don't cut."

Increase while others decrease

Companies need to be opportunistic and realise this is the perfect opportunity to increase their brand spending as most brands will reduce spending, so those who carry on will stand out. "Customers don't all forgo their spending during a recession, many become more value conscious. Brands need to understand the changing needs of their customers during recessionary periods."

So in order to weather this current economic downturn and come out ahead, companies will need to start thinking more strategically and less tactically, more about long term vision than short term success.