Marketing is even more important in recession period
Economic downturn, credit crunch, bankruptcy, … I guess everybody on earth (even further) is aware that we are entering difficult times (recession, deflation, …). Human reactions when we face a danger are: Freeze, Fight or Flight. What should we do as Marketeers?
Some venture capitalists or strategic consultants will give you the advise: cut costs!
I would say that you don’t have to cut your costs but you have to manage it in a smarter way. Indeed, the ultimate dream might be costs closed to 0 but that dream is only reached when you have … no company. For me, the no company option is not an option and therefore instead of cutting cost, I would advise to smarter allocate your costs. On what? on what makes a real difference in your business, on what drives your customers to your products, on what amplifies the most your commercial story, on what creates word of mouth and respects from your customer, on what makes you meaningful and different, …
Therefore, cutting your Marketing budget is a nightmare! Why?
Let’s assume before the crisis you have a Marketing ROI of x and a budget of y. Then you cut your budget y’ (<100% of y) but there is no reason that your ROI changes (cutting cost is not doing better). Conclusion, your effectiveness on the market is less (y’*x<y*x), your sales will decrease (the consequence of y’*x), which will force you to reduce again your budget, and so on so on up to the end (sales=0).
The other way around is to increase x by being more effective (do the right thing), which will increase your sales (y*x’>y*x), which will reduce the pressure on your cost and will bring you more business.
How do you do that? By systematically analysing your Marketing activities, by removing all customer toxic practices you have created, by focusing on the vital few products and services (the ones that match customer insights), by being clear on your strategy: the cheapest or the best! This strategic polarization is even more reinforced in crisis period (Aldi and Porsche will survive, we can even imagine to go shopping in Porsche to Aldi).
My conclusion for this presentation is not Get Real or Go Home but Get Meaningful (slide 54). And the only way to achieve this is to reinforce your consumer/client centricity as you would do in a one man business. In downturn, your sales & marketing departments (I am not speaking agency neither advertising) are even more crucial! Don’t cut them! Boost them, Challenge them, Coach them, Drive them! Love them!
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