Marketing will always be the first tree to get the axe during an economic slowdown likewise marketers, management who focus on the bottom-line will be expecting to get the ROI for the money they spend and if it doesn’t happen marketers’ jobs are always at stake.
By Sabareesh Menon
Today while I’m writing this every industry faces the challenge of marketing in an economic state of turbulence and uncertainty. The key to maintaining forward momentum in today’s market is to resolve to be competitive and shift to an opportunistic mind-set. Rather than focusing on the turbulence, your company should leverage the dynamics of a down market and become an even stronger competitor. A weak economy can actually serve as an opportunity to evaluate your marketing and public relations initiatives so you can make them more effective and efficient.
During economic turbulence, it is important for a company to view it as both an opportunity and a danger. Sometimes it is a bad idea to cut costs across the board. Marketing prodigy Kotler advises us to stop cutting the budget that creates sales and gives tips on how to measure the marketing spend with non-direct marketing. Turbulence, and the chaos that results, from an economic chaos, have two major effects. One is vulnerability, for which companies need defensive armour. The other is opportunity, which companies need to exploit. Let’s take vulnerability first.
The vast majority of companies around the world today are ill prepared or not prepared at all to succeed in an environment of continuous, unpredictable turbulence. And when economic turbulence hits a company that is ill prepared, chaos will result and vulnerabilities revealed. Now let’s address opportunity. It occurs when a company is responsive, robust and resilient, and has transformed or otherwise prepared its organisations and business models to manage turbulence and chaos in the new normality. Business leaders and their companies who will embrace the new normality will have implemented new systems to detect turbulence that can be detected, while also instilling new strategic behaviours within their organisations and their business models to minimise or preempt any ill effects on their businesses when turbulence strikes unexpectedly. Such companies can then take away competitors’ business, or even acquire competitors at bargain prices that have been weakened and made vulnerable by their inability to withstand the turbulence and its consequent chaos.
So what should companies do with marketing during a financial meltdown?
Maintain your spending
This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. But for that everything has to be strategically planned and executed. When a recession hits, marketing is typically one of the first places business owners are tempted to cut. This is a mistake that slashing the marketing budget in a downturn will only help defend profits in a short term. Ultimately the brand will emerge from the downturn weaker and much less profitable. Building and maintaining a brand that consumers recognize and trust is one of the best ways to reduce risk when the economy takes a turn for the worst. That’s why, in each recession cycle, the companies with a strong brand presence have come out on top. And, consider this: Cutting the budget for marketing during a recession is a gut reaction many inexperienced business owners (and even experienced ones as well) will make. If your competitors are cutting budgets, you’ll see an even greater long-term return on your marketing investments. Instead of making deep reactionary cuts, objectively look at where you’re spending money and what kind of return you’re getting on that money.
Rethink your marketing strategy
Rather than making random budget cuts to reduce your marketing costs, determine how much spending is feasible based on your current financial situation. Then create a new marketing strategy that optimises every dollar and integrates your activities to gain the highest return for every effort. This approach will ensure you forge a cohesive, strategic plan that will enable you to remain visible and strongly compete on a reduced budget.
Evaluate your brand
Now is the time to carefully evaluate your brand, the market and your competitors. You need to get a 360-degree view of your current situation and how your existing marketing activities align with the current market conditions. Review your marketing assets (such as your company’s brochures and website) to determine if they are relevant to today’s customers. Also look closely at your competitors to determine if your company stands out.
Target your marketing efforts
When marketing on a limited budget, laser-focused targeting of your ideal customers is vital. Invest your time in creating a targeted customer database to use for direct marketing. You may not be able to afford broad advertising efforts, but that’s OK because direct marketing (snail mail and e-mail) allows you to directly reach your customers in a more efficient and cost-effective way.
In a highly competitive market, you need to stand out with messages that are relevant to the times. Evaluate your messaging to ensure it connects with customers. Keep in mind that their wants, needs and interests may have shifted with the economy.
Update your core marketing materials If your brochures, website and other materials are not relevant to today’s customers, or if they blend in with those
of competitors, make the investment to update your core materials. Many times, customers will visit your website or request information before calling your business. Be sure to make a good first impression to optimise every opportunity.
Integrate traditional methods with online tools Today’s communication model is a two-way dialogue. Integrating traditional marketing tactics with web based
tools and social media can boost your response rates by engaging customers at a deeper level. In many cases, boosting exposure through online social networking adds very little cost. Direct marketing can be used to drive customers to micro sites (small, three to- five-page websites) that focus on generating leads. Empowering customer interaction with your company can add significant impact to your campaigns and boost exposure for those on limited budgets.
Generate media buzz
Increase your media exposure by launching a public relations campaign. Distribute regular press releases to your industry or local media outlets. Submit applications to speak at events or conferences as a thought leader. If your advertising budget is limited, supplementing your media and industry exposure with public relations is a good idea.
Increase your network
Network with other business owners and customers at industry or local events to increase awareness of your company and generate interest. Do not underestimate the power of word of mouth; it is a powerful, cost-effective marketing tool.
Remember, people don’t have to work for your company to work with you, and your peers are in the same boat as you are. Many companies cannot afford to hire extensive staff or experts when times are tough. Partnering with complementary companies can provide you with new leads and expand your network without adding costs. Look for win-win partnerships that can help your business move forward and help you achieve your goals.
Optimise your existing customers
Many companies spend all their energy trying to win over new customers when existing customers may be the quickest way to increase business. It is critical to maintain strong customer relationships to retain customers. Look for opportunities to upgrade and cross sell to your existing customers since you already have a relationship with them.
Resolve to become a fierce competitor to win more of the business that’s out there. It is possible to leapfrog the larger competitors in your line of business–not by spending more, but instead by shrewd opportunism. Take a look around–if your competitors have cut back on their marketing or gone dormant, you might have an unprecedented chance to overtake them. Make every marketing move strategic and calculated. Strong marketers will prevail.
Author is a leading Marketing Strategist. This write-up is adapted from Philip Kotlers talk on 2009 global meltdown and articles and book (Chaotics) associated with it.