Are you ready for a downturn?

Another downturn is coming our way. Everyone in the investment business, most industry chroniclers and quite a few consumers know it. But rather than scrambling to strategize and to be heard afterwards, isn’t it better for investment marketers to be ready before?

The threat of a downturn hovers like a vindictive black swan. We accept it will swoop, but we don’t know when. Yet those in investment marketing should think about what we can do to prepare for the bumpy landing.

This is not alarmist thinking, nor is it unusual. Markets and economies go up and down in cycles, but memories are short. It is up to investment businesses to remind clients on the merits of investing, and show them why they should invest with them.

Working in the industry and having experienced downturns before, we can get complacent. We know that investment markets are remarkably resilient over the long term.

But to clients it might feel like the end of the world, or at least that some of their dreams are dashed. And investors may need reassurance to prevent a bad situation from turning critical.

So when a downturn comes over the next few months or year, investment marketers need to be ready – to explain the rationale for investing and to persuade people to invest with you.

A company who understands investing, who appreciates your needs and the fears of your clients can help you hit the ground effectively.

The case for marketing, and maybe more of it

When the market or the economy blows harshly it is only natural for even professional investors to hunker down and wait until the ill winds pass. Marketing will often come under pressure from other parts of the business to rein in spending – a mind-set that is typically not driven by evidence.

In fact, doing the opposite is probably more appropriate.

When markets are down and everyone else is pulling back on marketing and advertising spend, this is when you should strike.

Thinking like this is not unlike how a highly active manager might behave: with complete conviction, the freedom to go anywhere, and by taking a contrarian stance.

Being active is the bold attitude investment marketers should adopt in a downturn – to have conviction and to go against the grain by increasing their marketing activities.

What investors need to know

When you ramp up your marketing activities you need to make the case for investing and for investing with you.

• You could mention the perils of inflation and of holding cash over the long term.
• You could talk about the long-term returns of equity and bond markets in comparison.
• You could show that markets often bounce back quickly and why it’s better to stay invested.
• You could assert that low prices make it a good time to buy.

Most investment companies will look to their strengths for how to frame messages like these. And you should also have your points of meaningful differentiation lined up and ready to deploy.

• This could be your actively managed process that lets you seek out often-ignored companies…
• Your range of ETFs with incomparably low fees…
• Your speciality in uncorrelated assets… or so-called safe havens…
• Your global team, with more fixed income or equity analysts than most…

Whatever unique points you summon you might want to think about how you can craft a story to cut through the noise, or what kind of campaign or messaging could amplify your strengths.

Most important, you should be prepared to unleash them when the time is right.

And if you need a marketing partner to help you ensure you are set to go, why not use one who has witnessed several downturns before – one who understands your language and the concerns of your clients.

We know a downturn is coming – only those fully prepared to respond can take advantage of these fairly frequent events.