While marketers are taking it on both sides with cutbacks by their bosses and their buyers, there are some actionable marketing strategy tips to empower your brand for the new year.
If there's one thing that's not in short supply these days, it's advice for what marketers about what to do to grow as the economy tanks. Unfortunately, much of the conventional marketing strategy advice out there-which usually goes something along the lines of spend more on marketing and innovate like crazy-does not reflect business reality at most companies.
What's more, many of the standard marketing responses to tough economic times focus on the old method of short-term marketing, concentrating too heavily on hitting the numbers now, no matter the costs to long-term financial and brand health.
For the new year, why not embrace the better long-term alternative? May we suggest five marketing strategy do's and don't's to help move the sales needle AND keep your brand in good enough fighting shape to take out the competition during AND after the recession.
#1. Maybe Do/Maybe Don't: Increase Your Marketing Spending
If we had a dollar for every time we've heard someone tell a marketer their best piece of advice for thriving in a recession is to raise the marketing budget and spend more, we wouldn't have to pop an antacid after checking our 401(k)s. It's positioned as counterintuitive, but it's become so commonplace to hear, "hey, you should be taking advantage of the fact that all your competitor's are slicing their spending and raise your marketing budget." It's almost conventional wisdom that it's a universally good thing to do. What's more, so few companies actually do it, it still holds some of that maverick caché. But is it really sound advice?
We'd agree there are some obvious inherent risks to holding the marketing budget steady-and even more to cutting it all together, a likely scenario these days-while a stronger brand solidifies, maybe even increases, its lead in the marketplace by spending more on marketing. Generally speaking, however, to increase or not to increase the marketing budget is an incomplete question. At the end of the day, whether or not you'll see any bottom-line benefit in the short- or long-run depends on a whole lot more than the size of the increase to your budget.
No matter the condition of the economy, the buyer target, the brand's positioning, the ad copy, the ad executions, and the media vehicles are more important than the budget in driving revenues. Our analysis revealed Three Sigma targeting/positioning/copy/ad execution/media vehicles yield much greater effects on market share and brand equity than doubling the budget. The message here: Get all the elements of your marketing strategy lined up before considering this bold move.
#2. Don't: Enter Into the More-for-Your-Money Race
It's a natural response to cutbacks by your customers: drop your prices, advertising more for less, give great deals. "Marketers across the board are dialing up the more-for-your-money messaging in an effort to coax cash-strapped customers into opening their wallets, and price cuts and promotions are creating a domino effect as companies chase best-deal status," reported Ad Age. Sadly, the assumption that lowering prices will motivate people to buy may miss the mark and hurts brand equity in the process.
While management intuition suggests that most consumer buyers and business-to-business decision makers are price sensitive, our research shows that price is the primary consideration for only 15 to 35 percent of buyers in most product and service categories. Even during a recession. Price may become a more important consideration as household and corporate budgets get tighter, but it is not necessarily-or even customarily-the most important consideration. The majority of buyers are simply not as obsessed with price as many marketers seem to be. What's more, price cuts can cause serious problems if they reset buyer expectations about prices or go against a brand's image. The halls of marketing history are littered with brands that dropped their pants to make a sale in a recession only to find they couldn't pull them back up again once it was over.
#3. Don't: Get Ugly With Your Advertising
"As the economy gets ugly, marketers are getting nasty too," reported the Wall Street Journal. "From soup companies to pizza chains, marketers are stepping up their so-called attack ads, calling out rivals by name, comparing products and poking fun at competitors." The National Advertising Division of the Council of Better Business Bureaus-a.k.a., the ad police-has seen complaints from marketers alleging they are the victims of misleading comparison ads jump substantially.
"In a downturn, people are being more and more careful on how they are spending their money, and more than usual you have to make sure you are breaking through and giving them a reason to buy you," explains Patrick Doyle, president of Domino's USA. He's got a point, but "their brand sucks" isn't going to do it. First of all, it's not exactly a defensible positioning-it's likely quite easy for your competitor to come right back and say, "no, no, YOUR brand sucks." The back and forth starts and pretty soon buyers have no idea who the ads are for or why they should buy either brand. To quote the Wall Street Journal, "Attack ads, when they get too intense, can confuse consumers." If your advertising raises more questions than it answers, you're going to get tuned out.
#4. Do: Walk Two Miles in Your Customers' Shoes
"Walking in the shoes of your consumers is the key to keeping products moving during a recession," the CMO of Kraft Foods Mary Beth West told an audience of fellow marketers. "And I am talking about walking not just a mile, but two miles."
Our take on her comment is that marketers should not only NOT guess at what will or won't work to motivate buyers during a recession, but also go beyond the customer information basics that everyone in the category likely has. Take the time to ferret out important insights specific to your brand such as who the profitable customers are, the problems the profitable ones have, the products (or services) they are looking for in the category, and on what (and it's more likely than not there is something) they place a premium that will get them to part with their scarce resources. The brands that will win this footrace are the ones that have the deeper knowledge of the twists and turns of the course.
#5. Do: Find the Blue Sky/White Space/Big Hairy Opportunity
It's true, nobody's perfect. That means there's a pretty good chance there's some area of importance to buyers in the category where everybody-you and your competitors-totally sucks. Where no one offers a solution to a seriously irritating problem or at best gives a middling response to something buyers say they really need or want. These areas are the blue sky, white space, whatever-the-going-catch-phrase-from-popular-business-book is-the things that make for the big marketing opportunities.
If ever there was a time when people are aware of their problems, pains, areas of dissatisfaction and willing to talk about them, it's now! Ask buyers what they aren't getting from your brands and others. Instead of calling out your competitor's deficiencies, figure out what people are missing in the category in general and determine if you can deliver it to them profitably. Don't waste your breath (and precious advertising dollars) explaining how and why your competitors can't get something (or anything) right. Instead, explain how and why your brand is uniquely qualified to solve their real problems in your advertising. Give people a reason to listen and you will break through-now in these tough times and, very importantly, when happy days are here again.
And when you do this, do it right. Don't make a promise to solve a problem and then not do it. Take Coke Zero. It used a great execution depicting Coke execs suing Coke Zero execs because Coke Zero tastes so much like Coke. Problem is, it doesn't. Not by a long shot.
Parting Shots
When the buyers of your products and services are really struggling, your marketing efforts need to have pinpoint accuracy in terms of who you are talking to, what about, and when in order to get them to pledge patronage and loyalty to your brand and not somebody else's. Marketers can successfully use the pressure they are under to help the company make their numbers and channel their nervous energy not into one-off, quick and dirty marketing tactics, but into putting together a well-thought out marketing strategy to drive sales, profits, and growth.
