You’re in a packed bar, you want to tell someone at the other side of the room something important. How loud do you have to shout and what are your chances of being heard? These are the good times. Do the same in an empty bar and you hardly have to whisper for someone to hear what you have to say. That’s a recession.
Customers are still there, just not in the numbers they used to be, but then, neither is your competition. So when you cut your marketing budget, did you do it in direct relation to the audience still left, or was it to hit a number an accountant wanted delivered across the board?
Accountants are lovely people (and we say this purely from a genuine, heartfelt standpoint that protects us from libel) but would you really let an Art Director have a go at your annual audit?
Why is it that in the good times we passionately believe that marketing works and in a recession it suddenly doesn’t? It’s either on the investment side of your brain and balance sheet or the expenditure side, there’s a mile of difference and market factors shouldn’t decide which side it flips between.
Cutting budgets takes little skill and even less imagination, adapting a strategy to take account of a lower spend takes great imagination, creativity and guts. Very few companies do this, which culls even more of your competitors from the arena of combat, surely?
The role of any agency in harder times is to allow for this at a strategic level and in every brief issued that delivers that adaptive strategy. It calls for solutions that would never have been tried when business was booming, because there was no need for them. Just as there is no need now for lavish campaigns now that burn money.
The role of a Marketer is to deliver growth against the market conditions, but deliver growth they always will. It can, and should, be measured against market trends, the competitor’s market share and be ahead of what a business in that sector is ‘expected’ to do. If an adaptive strategy takes all of this into account and delivers against the investment, where’s the cost in that? If it doesn’t, done blame marketing as a discipline, the strategy simply wasn’t good enough.
A £5 million campaign advertising baked beans is fairly straight-forward, on condition you can afford it (you can, the market conditions must be pretty good for you to do so and the volume of customers spending must be available). Yet a truck load of baked beans dumped mysteriously overnight in Trafalgar Square will probably still get you on TV. Both have different costs that take into account the audience size available and the money required to get a healthy ROI from that audience.
Interestingly, the population doesn’t shrink at all when interest rates go up, the consumer just stop spending as much. Did you have 100% of the entire audience already? Didn’t think so.
So how do you take less, but from more people, many of who are not spending with you? How do you get a larger slice of a smaller pie? What else will your product or service do without wholesale investment? And what new markets could be available to you with a little lateral thinking?
Lucozade used to ‘aid recovery’ in sick children. Then some bright spark noticed that the sport’s market was growing and the same ingredients were relevant to these consumers, even though the audience was completely different.
The product didn’t change. Let me say that again, THE PRODUCT DIDN’T CHANGE. What transformed the brand was strategy, which in turn lead to different packaging, distribution, sales support and market intelligence. All of which should be considered part of marketing anyway.
How much thinking did you do in order to convince people that it was a false economy before the cost cutting was imposed on you? How much are you doing now, when we all know that things are not going to bounce back within a fiscal year?
Ironically, research shows that those who spend during a recession get a much better return once the market returns and a higher market share as a result. Those that top spending have to spend more to reach the same position they used to occupy. So how much are you really saving if you can stop working solely towards the year-end and concentrate on the lifetime of the company?
So how much is all of this going to cost you? Well, if you’re nice to us we’ll be nice to you. We’re hardly going to make money if we don’t take a speculative approach now are we? You see, we changed our strategy ahead of the times and it’s really paid dividends.