Pulling the belt buckle tighter on marketing heading into a recession is the worst idea.
In fact, it could be the final nail in your coffin if your business is already on the struggle bus.
In today’s episode, Quinn and Kinsley discuss retail behavior during an economic downturn both on the part of the consumer and the retailer. According to Quinn:
“if everyone else has slowed down and their voice shrinks… that means there’s less noise in the market…[a]nd if that slows down and you’re the one powering through that, then you’re breaking through less clutter than you were before.”
But don’t just take their word for it. Mark and Mark cite to some pretty heavy hitters (Harvard anyone?) who are doing market analysis.
DOS Takeaways:
1. Learn how grab more marketshare in a downward economy;
2. Emerge as a Powerhouse
FULL TRANSCRIPTION
Mark Kinsley: All gas, no breaks. Winning strategies for marketing through a recession. Grabbing more market share and emerging a powerhouse. The Dos Marcos show begins right now.
Mark Kinsley: Welcome to the Galaxy’s Greatest Mattress Industry Podcast, hosted by yours truly and none other than Mr. Mark
Mark Quinn: Quinn. None other Kinsley.
Holidays are upon us, baby you. Are you ready to max and relax? Get the stretchy pants out,
Mark Kinsley: get the stretchy pants out. You know, we’ve, you know, Adrian and I over on the Fan Marketing show, we’re talking about five holiday themed tips to help you market your business better during the holiday season. And I thought there was some real gems in there.
You know, here’s a teaser on one of them. We’ve talked about this before. Put a Santa Claus mailbox. Or North Pole mailbox in front of your business. And then have kids come there and drop off their letters to Santa Claus. Your team can answer the letters to Santa Claus and then send a note back to the parents with, uh, some sort of offer to come in and, you know, buy some, some merch from you, buy some holiday gifts from you.
Mark Quinn: That’s so clever. What, what have you built on that idea and you had like a Santa Claus kissing. So moms from all over could come into your store and they could shop. Or while the kids were sitting on Santa’s lap talking about presents, like the moms could get a kiss. Like the song I saw Mommy Kissing Santa Clauss.
And then you get the picture, and then you can make, put the picture over the mantel place in the, in the living room. Are you
Mark Kinsley: volunteering to be Santa Claus? No. ,
Mark Quinn: no. I’m just trying to think of the dumbest idea I possibly can to crush your really good idea.
Mark Kinsley: How’s that? It’s, it’s creepy enough. Sometimes the Santa Clauss are creepy enough.
Um, and I don’t think we saw any creepy Santa Clauss did we at Santa Con 2022. Uh, no.
Mark Quinn: You know why? Because we were the creepy Santa Clauses. As a matter of fact, Mackenzie’s talking about, he’s like, Hey, tomorrow you wanna go with me to this pub crawl? Everyone dresses up in holiday, cheer and you know, puts on stuff.
And I’m at a place right now and they’ve got these Santa costumes for 25 bucks complete with wig and beard and boots, and. You know, come out and we, we go hit the bars and get content for the fam. And at the time I will grant you, it was a good idea until, um, it was 10:00 PM we started at two and . So we were out like, you know, hanging out with Buddy vi elf that was kind of, and, uh, did a little lion dancing with some of the other elves, and it was just fabulous and we had a great time and it was a great, you know, if you have a sleep, a SantaCon in your neighborhood, I’d highly encourage
Mark Kinsley: you to go.
You know, I was talking to my neighbor and he runs a bar, a really nice bar called Scotch and Soda. I was talking to him last night and I, he said, usually SantaCon. He’s one of the worst nights of the year because people go way overboard and, and, and they just kinda get outta control. And he said this year is pretty.
He goes, but I didn’t see very many people in full-blown Santa Claus outfits like you and I wore, and there were people taking pictures with us and we’re looking around going, where are the rest of the Santa Claus now? Like you said, they had some holiday cheer, but we went all gas, no breaks, which is kind of what we’re talking about today on the
Mark Quinn: podcast.
All gas, no breaks. As a matter of fact, we were the only Santas riding electric scooters. Also, so there’s
Mark Kinsley: that, right? And I gave other Santa Clauses rides on the electric scooter because it’s an electric scooter, so you can stand up, but it has a seat on it. So you could put . I put a Santa Clause on the seat and then I was standing up and giving her rides on my, on my sleigh.
Oh man,
Mark Quinn: what a night. The the, the worst part was the day I may or may not have fallen down when I got home. My wife thought that was hilarious, but I don’t drink a lot. So the fact that we were at it for several hours is not good. But Hey, can I ask you a question? Hit me. What do you think Santa would be doing on Christmas Eve if everybody shut off their marketing and advertising in the month of.
What
Mark Kinsley: do you think Santa Claus would be doing on
Mark Quinn: Christmas Eve? Yeah, what’s he gonna, what would Santa be doing on Christmas Eve? If everyone shut down their marketing for the quarter, he
Mark Kinsley: might have a very different evening. I mean, I’m pretty sure he is still gonna try to sneak down your chimney and grab a few cookies, dip it in the milk.
Uh, he’s gonna probably try to go on a, a reindeer ride, but his, uh, yeah, his, his bag might be a little less full.
Mark Quinn: He’s gonna be bored because not many people are gonna be buying as many presents because people aren’t driving them in the market. Mr. Kinsley, which is why we’re here. All gas, no breaks.
Question for you listening is do you slow things down? You know, when business slows, the economy gets challenged, or do you add fuel to your fire and invest into the downturn? Kinsley, what are your thoughts?
Mark Kinsley: So I wanted to get good, clear perspective on, on this topic. And so probably the best place to do just that is to tap into history.
So I went back to a Harvard Business Review article from 2009, and anybody that was around in 2009 and in the workforce or trying to buy a house or any, just, you know, being an adult at the time, knows that there was a major recess. And, uh, veritable, you know, economic collapse, uh, in 2008 due to the housing crisis and due to unsavory lending practices and so on.
The other side of that, you know, we were looking at the, the, really, the, the biggest depression or recession since the Great Depression. And so I wanted to tap in and get some perspective because now historically we have a recession to look back at as we look at interest rates continuing to. To try and slow down consumer spinning.
We’re looking at housing prices becoming, um, kind of unattainable for several categories of people who may be ready to move out or people that are, you know, ready to purchase their first home. Um, and then the, the prices are high and the interest rates are high. So we have a confluence of events that are creating these economic conditions that everybody seems to just be, um, resigned to some sort of fact that we’re in a recession or we’re gonna be in a recess.
For quite some time. A lot of people have said we’re in it already. Some people are saying we’re not in it. Regardless, we’re gonna start to see, you know, the potential for consumer behavior to change. And whenever that does change, let’s call it a contraction in consumer spending, how should you market your business?
And this is a, this is a topic that, like I said, Harvard Business Review tackled. And here’s what they said. They said companies that put customer needs under the microscope. Take a scalpel rather than a cleaver to the marketing budget and nimbly adjust strategies, tactics and product offerings in response to the shifting demand are more likely than others to flourish both during and after the recession.
Hmm. So we, we gotta tease that out a little bit, obviously.
Mark Quinn: Yeah. So, so keep going with that. Kinsley. So I also did a little bit of research, and to build on what you just said, McGraw Hill did a study with 600 companies from 80 to 85, 19 80 to 1985. And basically, uh, companies that decided to advertise directly or aggressively during the slow.
Had a 256% higher. Sales growth than those that had stopped 256%. So, you know, I think part of it, theor theoretically, right, is if everyone else has slowed down and their voice shrinks and that means there’s less noise in the market because that’s what a lot of the advertising in our category, it’s noise, it’s product price and promotion, drum beat.
And if that slows down and you’re the one powering through that, then you’re breaking through less clutter than you were before, right?
Mark Kinsley: That’s right. So advertising is actually gonna get cheaper. And if you think about maybe your own situation or conditions back in 2008, 2009, and the ensuing recession, Uh, you probably know some different stories.
Uh, one I remember is a friend of mine had an engineering company and while their competitors, uh, were, you know, laying people off, they decided, Hey, as a team, let’s go to a four day work week. Uh, let’s, you know, continue to work hard, but not take away any employees. And of course, on the backside of that, they were able to take market share for the competitors because they had a full staff and they were able to ramp up so quickly and go grab that business.
Going back to this Harvard business, Study. Um, here’s what we, I think what we need to be thinking about for the mattress and furniture industry and even appliances industry is regardless of, um, which group consumers belong to, they prioritize consumption by sorting their products and services into four categories.
Okay? So think about us and the, the items that you sell in our industry, and then think about these four categories. Consumers are looking at it saying, Hey, these are essentials, these are treats. These are postpones or these are expendables, meaning unnecessary or unjustifiable. Which of those four categories, Quinn, do you think we fall into?
Essentials, treats, postpones or expendables? Postpones. Yeah. Postpones, uh, are needed or desired items whose purchase can be reasonably? Put off now appliances. That’s a clever way to look at that situation. Cause you’re talking about duress, but furniture and mattresses definitely can fall into postpone balls.
I was just gonna say,
Mark Quinn: that’s a clever way to look at it. I’ve never heard it framed like that.
Mark Kinsley: Well, and here’s what they’re saying happens. Um, consumers become obviously more price sensitive. Whenever they’re in a time of recession and they become less brand loyal during recessions, so they’re gonna seek out their absolute favorite products and brands at reduced prices, or they’re gonna look for a less preferred alternative.
So if they are in the market for a mattress, for example, they might, you know, be looking for, so if they, if they’re like, I have to have another one of these because I love the mattress, I. That might be one consumer, but a lot of people are gonna say, ah, is there something similar? . So maybe that’s the opportunity, is your more value price product at a, at a lower price point.
And, and I looked at, I looked at another kind of the, some of the tactical stuff and it said, um, okay, so maybe if you do have a premium brand, should you move down market And, and hbr, Harvard Business Review said no, but maybe introduce a fighter brand, a lower price version of a premium offering, sell it under a different.
And, you know, back it up by a little bit of advertising. That’s what Anheuser-Busch did on the heels of recession in 91 92, Anheuser-Busch introduced its natural Pilsner brand, so it had priced it lower than Budweiser and Miller. And then they, uh, brought out another value price called Calder’s 29. And that was, uh, and, and, and, and, and, and so they launched those kind of fighter brands.
And then after the recession starts to end, you can like slowly phase out that fighter brand. So you have something to offer at a value price point, but you continue building value in your premium products. That ultimately is where you want to get your sales.
Mark Quinn: Yeah, you, you know, the, the fighter brand idea.
I like, um, I like that they also said, don’t go down market, don’t hurt your brand long term. Um, and when you were talking about that, it kind of made me think like, you know, if you’re gonna invest in your brand, like if you’re a postpone, I mean, I think you really gotta face that, right? And so if you’re a postpone, like how do you, how.
Push Outside of that, how do you make what you do? Something that is more valued or is something that they place a higher value on because they know if they have it, like it will mean more to them than say, taking a trip or you know, redoing the floors or whatever. So I think it also is maybe something that would inspire people to think about.
How are we talking about this? Like how do we become more important? How do we put ourselves at the top of the shopping list instead of at the middle to the bottom of the shopping list? Because oh yeah, we can get a, you know, we can get something or, you know, we’ll, we’ll be fine until, you know, an another six months.
Like how do you overcome that part?
Mark Kinsley: Well, I think you’re getting into some really rich material because you can have the commodity conversation of price and item mattresses, for example. Or you can look at yourself like a diamond company. And this is exactly what happened with DeBeers. So they realized, uh, they, they had cut their marketing budget in in 2008 because of the grim economic outlook, and it was grim at the time.
However, they continued to invest in consumer research to get a, a bead on what people are willing to spend their money. And of course at that time they were thinking diamonds. You know, this is a luxury item, it’s a postpone, maybe even an expendable. But they found out that the majority of consumers, uh, revealed that diamonds represent enduring value to the majority of consumers.
So what did they do? They doubled their Christmas advertising spend over the previous year, and this is in a recession. And, uh, they said their messaging was, here’s to. And, you know, fewer, better things because a diamond is forever. And so what happened, uh, Christmas sales in the United States were softened compared to the previous years, but prices were stable and the consumer proved that there was still a desire to buy diamonds.
And so when I think about that story in relation to our stories that we tell, it is all about sleep. You know, you , if you’re going. Buy less and do less, you know, do it with a great night’s sleep. You know, building value in sleep. It’s emotional benefits, it’s wellness benefits, it’s ties to health, um, you know, better looking, better feeling, losing weight, all the stuff that you and I talk about.
But absent of value, people make decisions on price. So I think we have to take a page from de be’s playbook and understand what has enduring value and what doesn’t happen during value. You know, it has
Mark Quinn: enduring value, happiness, joy. I mean, you could, you could make a case that Christmas Kinsley wouldn’t even exist if it wasn’t for a mattress, right?
Because if Santa isn’t sleeping well and resting well and the elms in the reindeer, like they, they probably have killer hybrid mattresses at the North Pole for all the albums and for the reindeer. And if no one’s sleeping well, if they’re not gonna drive tired, isn’t they getting in a sleigh? He’s got all that night to hit.
I mean, I, I think mattress, I think you could write a new song for Christmas or you know, a play or a cartoon to air every year about how the mattress saved Christmas. What do you think? . ?
Mark Kinsley: I love it. I love it. You know, some of the best advertising I look at every year is, uh, is it John Lewis? Uh, out of the uk mm-hmm.
And it’s just this, these wonderful, emotional, meaningful spots. And this is a furniture. Um, so, hey, I wanna ask everybody here, what are your thoughts about maintaining your spend or even spending more or getting real surgical with where you’re gonna reallocate budget, head over to fam.news and you know, tell us, you know, how you’re thinking about spending your money.
Um, are you thinking about, you know, keeping your foot on the gas pedal? It reminds me of, uh, we actually had Eric Grimley from Esquire advertising on the fan marketing show, and he, he talked to us just about the idea of Ashley, Ashley Furniture. So Ashley in 2008 was not the behemoth that they are today, but during that downturn, they got more aggressive on many fronts within their business and look at what they are today.
And so that’s, you know, historically what we see happen is when people get really clenched down and they put a vice around their budget. And they’re not thinking about, you know, a pipeline of innovation from when the consumer is ready to reemerge and spend money and, you know, not continuing to invest and keeping your brand top of mind.
Um, it really is all about what happens after the recession. And that’s what this, this article was, was getting into from 2009, um, consumer goods companies that were able to increase their share of voice by increasing or maintaining advertising. Captured market share from weaker rivals, number one. So you’re gonna get market share from your weaker rivals, um, and you’re gonna do it at a lower cost than when times are good because ad advertising inventory is gonna be cheaper.
It’s gonna be cheaper and beyond that. On average, increases in marketing spend during recession have boosted financial performance throughout the. Following the recession. And I think that’s the key. You know, we had Julia Rosein on the FAM Marketing show as well, and I remember her talking about how to, how to market on social media during the holidays.
And her key was don’t just start doing it during the holidays because the algorithms in social media need to know you’re gonna be there. And that consistency of content posted over time when Christmas and the holiday season does hit. Gives the signal to the social media algorithms that, oh, they’re good.
Let’s prioritize. Prioritize their stuff. They’re not just showing up, uh, for one party a year. So I think these are all like little nuggets that we need to, you know, be thinking about as we roll into, you know, recessionary times or times of contraction. Um, and like I said, have a pipeline of innovation ready to roll out.
Because when people do start, you know, stretching, coming out of the cave, emerging outta hibernation of a recession, what do they wanna do? They wanna see what’s. They wanna see what they missed. They wanna see product innovation.
Mark Quinn: It, it makes me think about the book. I’ve referenced it a couple times on this show called The Untethered Soul.
One of the concepts of the book is, no matter what state you’re in, you’re happy, you’re sad, you’re angry, you’re frustrated. It’s a, it’s a state of energy and it’s, it’s momentary, right? It passes, um, the good times in your life. Uh, unfortunately they’re not permanent. They pass just as much as the bad times of your life, right?
And I think it’s similar in, in an economy like the, the, the thing to remember here is that, look, you know, we’re coming out of it and, and it’s a great reason to be. Very responsible with the money in your business so that when you get to times like this, you have some stuff squirreled away that you can, you know, go after and lean into the downturn so that you can grab market share.
You wanna grab market share. You sit there and work with, work on it all week or all year long. I mean, how many meetings you guys have, you’re sitting and you’re like, how do we take market share? How do we grow our business? Well, this is the time if you wanna grow, market share if you wanna. , uh, grab, share from your competitor.
What better opportunity to do that? And Kinsley, you know, if people need to be more efficient with what they’re spending, there are some really good examples here of ways to do that. For instance, shifting away from a 32nd spot to a 50 sec, 15 second spot, um, advertise brands jointly with the market, uh, with a marketer in a different product category that targets similar consumer segments.
Think about that. We talk
Mark Kinsley: about partnerships all the time, Don. I mean, can you imagine like, if there’s a chiropractor in town that wanted to team up and do a, a, a, a creative, you know, TV spot or campaign with a mattress store y yeah. You’re both on camera at the same time, and you come up with some sort of creative wave to, you know, transition from the chiropractor over to the mattress store.
But what a, what a really cool creative. To build community with other people, serving people with similar needs, and also get more efficiency outta your ad spend. Yeah, cut it in half. Yeah.
How
Mark Quinn: about with a health, uh, you know, a health like a, a like a, a gym, right? Or something like that where you’re like, Hey, look, new Year’s is coming up.
Let’s like team up and it’s like, Hey, you know, create a new you. And you can work out and you can sleep better and it’s literally gonna change your life. You enjoy you and experience a different level of joy this next year. Like this is the way to do that. Why not? Why not go after that? Um, and it also mentions, Hey, don’t, don’t go cutting new spots.
Right? So maybe extend. The life of what you have. You could even go lower cost on producing media or video and just have some more fun. Because you and I both know, we haven’t had budgets to, in, in companies that we’ve worked for. We’ve always been, um, challenged by the big, you know, the big ad budget, the big marketing budget.
And when you are challenged with that, then it forces you into being more creative in how you approach things. So I like that too. Good opportu. Um, but anyway, I guess at the, at the end of the day, uh, the story is, you know, don’t, don’t slow down and, and don’t stop. Because when you, when you get through it, it is a season of time and you are going to get through it.
Um, that’s when you know your investments gonna really pay off in. You are gonna be the one counting your money all the way through the bank because you did what was the right thing to do and really gone after it.
Mark Kinsley: Yeah, let’s do a little reset here. So we’re talking winning strategies for marketing through a recession to grab more market share and emerge as a powerhouse.
And you know, a lot of reference back to this H B R article from 2009 that showed us what. Worked and what didn’t work during recessionary times. I really like, uh, this thought of understanding the consumer segments as well, because you’re gonna have four different types of people. So we talked about the four different pri types of product categories, and we put ourselves in the postpones category, but you have four different types of consumers and how they react from a spending standpoint to a recession.
You have the people that they slam on the brakes. You have people that are feeling the pain with the. You have people that are comfortably well off, and then you have people that I’m living for today, man, I’m just living for today. So how do you, as a postpones, let’s call it, how do you hit the people that are in these four different customer profiles?
Well, if, if they’re a slam on the brakes type of person, uh, you can offer, like they’re not spending anything you can offer layaway, um, low cost financing, um, really, really exceptional deals, things like that. If you. Looking at the people who are feeling the pain, pain, but patient. Um, you know, simpler models, lower prices, uh, lower operations, cost models, the, uh, you know, promote, re repair services, especially if you’re in the, you’re in the appliances business.
If you sanitize mattresses, you can get in their home by sanitizing their mattress. Um, people that are comfortably well off, uh, promote some sort of savings from them Buying now. Uh, and advise that they’re gonna miss out by postponing. And you gotta kind of get that FOMO going on. And then the people that are living for today, I’m just living for now, man, just o offer, you know, monthly payment plan or qualify for some list of benefits when they buy now.
So there are ways to segment out your product category in, of course, your buying profile. And come up with, uh, you know what you can do now, discounts. So in these tough times, discounts that require very little effort from, from consumers and give cash back at the point of sale. That type of thing are more effective than any type of delayed promotion, like a sweepstakes or a mail-in offer, anything with delay.
So it’s gotta be, give it to me now.
Mark Quinn: Yeah, I, I love that you broke that apart, Kinsley and kind of talked about the different groups. You have to have empathy, there are different people shopping with you. Totally love that. One thing you said that jumped out at me was the messaging shift, right? And so, I mean, what, you know, to your point earlier, I mean, media’s gonna cost you less.
Like what if you tried some stuff at this point in time? Right. Where maybe you normally haven’t been, uh, you know, agreeable to, Hey, we’re gonna like go a different path or try a new promotion, or do something different. If media is truly less expensive, how do you, how do you really. Break through the clutter.
How do you really, you know, the, the, I I read an article this morning. You, you mentioned fomo. I read an article about that and the fear, actually, you know who it was? Kinsley? It was, uh, oh gosh. It was, uh, Roy’s, uh, Monday morning memo. And he talked about the fear of missing out and how compelling it was.
And he is like, Hey man, you know, fear of missing out is one thing, but there’s hope, you know the hope of a better future too, right? So there’s, if you don’t do what we’re talking about doing, you are going to miss out, but prevent, you know, provide hope for them. And so if you wanna experience the maximum amount of joy with your family over the holiday, a great way to do that is to sleep well.
If you want to finally not. Break your New Year’s Eve promise. Make it an easier one. Make it about sleeping better, which means all you have to do is go to bed earlier, and, and stay in bed longer, right? Like, I’m in, I don’t have to go like we’re at a gym and like kill myself and, and I can eat good food, right?
But, you know, maybe a messaging shift is appropriate as well and you know, for the time, right? You can kind of match that message to the time and, uh, see if you can try some
Mark Kinsley: new. Well, great stuff here. I think, I mean it, it’s a good reminder about staying aggressive, keeping your foot on the gas pedal and what it can mean during and after recessionary times.
I know it’s the R award. We’re gotta be careful with it. Uh, but hey, you have tips you wanna share with us. Head, head over to fam.news, fam.news, subscribe to the podcast, leave us a review, all that fun stuff. And you can text us there in the bottom right hand. And, uh, check out all the great stuff. I mean, we got lots of podcasts, uh, lots of great articles there from, you know, Alex and Adrian and the whole team at the fam.
And, uh, we just wanna wish you everybody. Happy holidays, Merry Christmas, and, uh, let us know what you’re thinking about for the new year. I’d love to hear from everyone.
Mark Quinn: Yeah, I wanna join you in that Kinsley. Um, I, I think, I don’t know, I didn’t look at our publishing calendar, but, um, for everyone that is going to the holidays, just know that, uh, you guys are awesome.
We care about this audience a great deal and we love it. And so, so glad we get to spend the time with you guys and, uh, we know that you’re gonna be with your families over the holidays, so enjoy the heck out of it and, uh, come back cuz your fam will be here.
