2025 trend: Marketing to prepare for recovery
New Zealand has endured a long economic downturn, but with signs emerging that we could be near the bottom, marketers need to position their brands for the recovery.
We might be out of recession, but it doesn’t feel like it. At the edof 2024, New Zealand’s GDP per capita, a measure of our individual wealth, was about 4% lower than its peak in September 2022.
Will we finally turn the corner in 2025? Shamubeel Eaqub, Chief Economist at KiwiSaver provider Simplicity, expects the year to see a slow start but a strong finish.
“There are growing signs that we are nearing the bottom of the economic cycle. Retail spending is stabilising, and households and businesses are becoming more optimistic,” he says.
“Most importantly, the Reserve Bank of New Zealand is cutting interest rates, which will reduce the cost of borrowing and – in time – will lift borrowing and investment too.”
A way to go yet
However, Eaqub says there are still some difficult months to traverse, with slowing net migration and fiscal austerity remaining as headwinds.
“Also, households haven’t quite recovered from the inflation shock yet. They still feel like money doesn’t go far. They will need to see more wage increases and a stronger labour market, so they can have the money and the confidence to spend and invest.”
What does this all mean for marketers? Eaqub says “it should really be the best of times” for marketers, because when the economy is hard, a business grows through market share.
“Marketing is a critical part of a recession plan. But many businesses perversely cut marketing spend during downturns. Marketers need to be close to their customers to understand their economic and business reality, but also to be able to articulate their services as a ‘must have’ that is value for money, rather than a discretionary luxury.”
Eaqub acknowledges that investing in marketing during a downturn can be difficult. “The next best time to market is when you can see a recovery coming. Which is where we are now – green shoots on the horizon,” he says.
“Now is the time to get businesses, products and services in front of customers to start building awareness and growing the funnel. When the economy turns, investment in marketing will pay dividends – because then it will be easier to convert awareness to sales.”
Stay close to customers
Dominique Touchaud, Founder of marketing consultancy Shokunin Marketing, says businesses need to handle relationships with customers with great sensitivity and care. He has two pieces of advice for marketing during a recession:
Never pull out completely: “If you believe your product or service is right, find alternative ways to provide it so that its value is understood beyond its price. That could be a different channel mix (online/offline), shifting marketing investment from one line of product to the other, or focus on loyalty schemes which rewards customers who stay with you through tough times.”
Focus on value, not on price: “Fighting a recession on price only will likely erode your margins and end up with a cash crisis on your end.
“Of course, there is no single answer that will work for all, but tapping into and being sensitive to the mood of the nation is always hugely important.
“When the going gets tough, your customers will thank you for providing them with feel-good moments right now,” he says.
The other way is to reframe the value your product or service provides. There are many ways to do this, says Touchaud.
“Time mileage is a good one: how long does it last? Battery buyers tend to stick to the most expensive products in a recession because they last longer and never fail.”
Marketing for lead generation
More than 60% of New Zealand companies cite a lack of sales as the primary constraint in their business, but they should avoid the “hire a salesperson” trap, says one expert.
“People think they can hire a salesperson, and sales will grow. But a salesperson by themselves cannot solve the problem of low sales,” explains Assia Salikhova, Managing Director of Smarketing Lab.
Salikhova says marketing, not sales, drives lead generation.
“If your business slashed its marketing efforts in 2024, you risk an even worse outcome in 2025 unless decisive action is taken.
“A solid marketing plan does more than raise awareness, it prepares your business for sustained growth.”
Salikhova has three tips to ensure your sales strategy aligns with long-term success:
1. Invest in marketing before hiring sales staff: Ensure you have a strong lead generation system in place. Focus on creating content, improving visibility and nurturing relationships with existing customers.
2. Provide salespeople with the right tools: Equip your sales team with scripts, collateral and training to ensure they can perform at their best. Salespeople need support, not just leads.
3. Prioritise customer retention and outreach: Re-engage past customers through personalised marketing efforts. They’re often your most reliable source of future business and can help keep your sales pipeline healthy.
This story was published in NZ Marketing magazine issue 81, December-January 2024/2025.
Read more stories from issue 81.
