“Should we pull the plug on our marketing because of coronavirus?” If I had a dollar for every time a credit union CEO has asked me that over the past few weeks, I’d be able to retire. The answer is: NO! History has demonstrated time and again that cutting marketing during times like this will leave your credit union atrophied (and possibly non-existent) after recovery begins.
Flashback to the recession of the early 90s, during which both Pizza Hut and Taco Bell took advantage of McDonald’s decision to deeply cut its advertising and promotional budget. Coming out of the recession Pizza Hut increased sales by 61% and Taco Bell sales grew by 40%. And McDonald’s? Sales declined 28%.
Prior to that during the energy crisis of 1973-75, the U.S. government issued its first miles-per-gallon report in which Toyota Corolla was second to Honda Civic in fuel efficiency. Because Toyota was experiencing strong sales, when the economic downturn hit, the temptation was to drop its ad budget. Toyota, wisely, resisted and stayed the course with its long-term strategy. By doing so, Toyota surpassed Volkswagen as the top imported car maker in the U.S. by 1976 as the economy turned around.
As far back as 100 years ago, Post was the market leader in the ready-to-eat cereal category. During the Great Depression, Post made big cuts to its advertising budget, while rival Kellogg’s doubled its advertising spend. Kellogg’s invested heavily in radio and introduced a new cereal called Rice Krispies, featuring “Snap,” “Crackle”, and “Pop.” Kellogg’s profits grew by 30%, overtaking Post, a position it has maintained ever since.
Warren Buffet said it best: “Only when the tide goes out will we see who’s been swimming naked.” The brands that fail to maintain their presence in the market, engage consumers, and solidify connection with their members and community will be exposed in the recovery.
As YMC’s 30 plus client credit unions continue full steam ahead with their strategic marketing plans, pivoting to address members’ needs and adjusting to remain relevant with the new challenges, I have no doubt we’ll see they’ve got full coverage. These credit unions will ride the tide stronger, alongside Pizza Hut, Taco Bell, Toyota, and Kellogg’s. Overcome your fears to seize the opportunity to reach out and help members. It’s credit unions’ philosophical imperative and smart business.
Your Marketing Co is a CUES Premier Supplier Member.