The economy is sour, consumers aren't buying, and the competitive landscape is mutating. From marketers everywhere we hear a collective "where to even begin?"
"Start with a company-wide deep breath, since it's so hard to panic during a deep breath, and it's conducive to thinking and creativity, too," suggests Tim Berry, president of Eugene, OR-based Palo Alto Software.
He and a few other industry pundits—including Seth Godin, David Meerman Scott, Bryan Eisenberg, and Jonathan Salem Baskin—recently lent their advice for marketing smarter, and for less, in the down economy.
You'll find their comments and more here in our quick list of the steps that marketers can immediately start taking to hone their programs and cut back on expenses.
Step 1: Get back to basics
When the going gets tough, the tough get down to business and figure out exactly where they are, how they got there, what it was that originally led them to their heyday, and how they might evolve those strategies to function through the current economy.
"These downturns are good for spurring us to step back away from the business and take that fresh look; it's like an artist squinting to see the landscape differently," said Berry.
His recommendations include setting aside time to do a thorough SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis and answering vital questions, such as these:
- What makes your company unique? What advantages do you have to leverage? Which challenges can be transitioned into opportunities? And is the company prepared to take on those challenges?
- Where do you make the most profit? And where are your resources being spent? To what extent do those connect?
- Are your products and promotions aligned with current market needs and expectations? What is the overall perception of your company and product in the marketplace? What are your customers saying?
- What are your competitors' strengths and weaknesses? How do competitor products and promotions compare with—and impact—your products and promotions?
- Which is your most profitable customer segment? And which customers are you most likely to retain if the economy worsens? Are there alternate market segments that might now be better positioned for your products and services?
- What are the current and foreseeable trends in your industry? Are there any emerging trends on which you may be able to capitalize? How might your value proposition be altered to reflect new trends and new consumer expectations?
- How up-to-date is your marketing plan? How valid is the rationale behind your current marketing programs and promotions? Is your marketing accountable for results?
Your SWOT analysis won't necessarily paint a pretty picture, but if you go about it honestly you'll gain a much clearer view on where you should be focusing your efforts.
Step 2: Let the data be your light
As businesses realize that this economic downturn is not some minor blip that will soon correct itself, marketers must reconcile with the fact that things have changed for the long term, and so must they.
And as we begin the process of determining what to keep and what to cut from the old "game plan," it is important to realize that this is not the time for guessing or playing favorites with campaigns of sentimental value. It's time to put our trust in cold, hard data—for real this time.
"The days of propagating brand image into the cosmos are long gone.... Marketers need to find ways to map behaviors against desired outcomes, [and figure out] what actions will lead targets to buying things," offered Jonathan Salem Baskin, marketing strategist and author of Branding Only Works on Cattle. "Think about shortening, or making more direct, the connection between marketing expenditure (or tactic) and some demonstrable behavior evidenced by the target customer or consumer."
Bryan Eisenberg, analytical-marketing consultant and author of Teaching Your Cat to Bark, said one of the biggest mistakes companies make is collecting the data but not analyzing it or leveraging it to make improvements.
"Companies need to understand not only how to get the data but also what to do with it, and that takes work," he explained. "It's a four-letter dirty word, but ultimately it is the key to being successful."
For example, women's clothing retailer Intermix (the subject of this week's premium case study), was able to increase multichannel revenue 9% from June 2008 to January 2009 by doing just that—repeatedly digging into the numbers to identify unique customer segments and the specific offers that appealed to each group individually.
"Execution is not a one-time event," Eisenberg advised. "Execution is something you have to do on a regular basis. There's always something that can be improved, and it's about finding the biggest hole, patching it, and doing that relentlessly."
In addition to demonstrating the overall advantage of ongoing testing and refinement, the Intermix campaign illustrates the need to look at not just how one marketing tactic compares with another but also how distinct customer segments respond differently to the same campaigns.
Eisenberg recommends taking the time to dissect any non-campaign components that may influence the customer experience (the company Web site, for example), and making incremental improvements that help increase conversion on a more permanent level.
Step 3: Take the high road
Consumers are skeptical—and who can blame them, considering the number of financial scandals that have recently come to light. But that's why now, perhaps more than ever, it is essential for companies to appear very upfront and honest, smart, and innovative—as leaders that consumers can, and want, to trust.
It's time to think best-practices, not gimmicks.
"I think the down economy is no real barrier to marketing remarkable products in a human way," offered bestselling author Seth Godin, who offered incisive wisdom: "Instead of yelling, connect. Instead of pushing, lead."
Hyundai Motor America, the pioneer of "America's Best Warranty," recently launched an industry-altering campaign when it announced its new Hyundai Assurance Program, which promises consumers the option to return their newly leased or financed Hyundai vehicles and "walk away" from any loan obligations should they lose their incomes within the coming year. "We're all in this together, and we'll all get through it together," its ads tell consumers.
The Associated Press reports that the program has already had an impact on Hyundai sales performance, assisting a 14.3% growth in sales in a time when most of the company's competitors are struggling with losses.
The program has "struck a chord with American consumers during these uncertain times," Dave Zuchowski, Hyundai Motor America vice-president of national sales, said in a statement.
Tim Calkins, clinical professor of marketing at the Kellogg School of Management at Northwestern University, agrees that the Hyundai campaign is a commendable approach in today's economy. "Advertising has to connect with folks," he explained in a recent NPR interview about recession marketing. "You don't want to talk about price and being cheap... you have to talk about value, or you've gotta really talk about what makes you unique."
Step 4: Go social
Following Godin's and Calkins' advice for connecting with consumers has recently become easier—and much more cost effective—with the dawn of new online media.
"We're living in a time when we can reach the world directly, without having to spend enormous amounts of money on advertising and without investing in huge public relations efforts to convince the media to write (or broadcast) about our products and services," explained David Meerman Scott, marketing strategist and author of the bestseller The New Rules of Marketing & PR.
Organizations such as performance company Cirque du Soleil and online invoicing service Freshbooks have been working to establish themselves on social-networking sites such as Facebook and Twitter, where they can make personal connections with customers through one-to-one interactions.
"We have found [Twitter] to be one of our most successful tools from a listening and engagement perspective," a Freshbooks representative said.
Other companies are using low-cost online media to directly grow their businesses—with fantastic results.
For example, as consumers cut back on major purchases throughout most of 2008, used-car retailer Auction Direct USA realized an annual sales increase of 40%. IT/Web director Eric Miltsch attributes a strong majority of that growth to the company's low-cost online-marketing efforts, which include social-networking sites, mobile web sites, and a company blog.
In another example, Paris, IL-based pet food retailer K9 Cuisine has grown its business from the ground up—achieving $2.5 million in sales in less than two years—without spending a dime on traditional advertising. Instead, the company engages in online forum conversations, has a company blog, and connects with customers on Facebook and Twitter. In all cases, K9 Cuisine is careful to offer content of value, which is helping the company establish trust, along with a very loyal customer base.
"There is a tremendous opportunity right now to reach buyers in a better way: by publishing great content online, content people want to consume and that they are eager to share with their friends, family, and colleagues," Meerman Scott said.
"Instead of investing tons of money in expensive agencies and big-bucks advertising, create something valuable and publish it on the Web for free."
Interested in conducting a SWOT analysis like Tim Berry suggests, but not sure where to begin? Check out SWOT Analysis How-To Guide (FREE) from the Marketing Tools section of the MarketingProfs Library to learn all you need to know. As a Premium Member, you have free access to this and hundreds of other templates, tools, case studies, research, and “how-to” guides to help you rapidly build effective marketing programs.
