CEO strategies in a tight economy must include marketing, as it is a versatile business tool that can be deployed during uncertain economic times to stabilize current customer bases while continuing to build the brand.
Over the past six months, the daily drumbeat of economic predictions has put a great deal of downward pressure on CEOs and especially marketing directors. Depending on the industry they’re in, some MDs are staying the course while others have drawn in their oars and tightened their spends.
What makes the decision to push forward or cut back particularly difficult is that the current economy is not impacting all industries in the same way. Mortgage and real estate are taking it on the chin while hospitality and travel continue to flourish. Weekly headlines announce big tech layoffs while healthcare companies are onboarding new employees at a rapid pace.
Add to these the ongoing unease about the war in Ukraine, robust consumer spending, the upcoming fight over the national debt ceiling and relatively stable GDP predictions, and you have a form of economic seasickness. It doesn’t help matters that when companies cut costs in uncertain times, the first, knee-jerk reaction is to start with marketing. After all, that’s often where the most immediate savings can be used to plump the bottom line without directly impacting operations, service delivery or the customer experience. Right?
But imagine that you’re used to seeing the same truck regularly delivering packages on your street. One day, you realize you haven’t seen it in a while. Initially, you may wonder what’s going on but pretty soon you forget about it all together. This is a loss of mindshare and it gives the competition a prime opportunity to come in and take your place.
Understanding the customer’s Point of Truth (P.O.T.)
Marketing is a versatile business tool that can be deployed during uncertain economic times to stabilize current customer bases while continuing to build the brand.
Impactful marketing solves conflict. Understanding where customers are conflicted and then providing a solution brings them both relief and a sense of empowerment. For example, drivers want to take good care of their vehicles, especially if they need a reliable car to get to work. On the other hand, they may be inclined to put off regular maintenance because they’re in saving mode due to the economic uncertainty.
What can a dealership or service station do to incentivize them to keep their car in good working order? How about offering a limited-time service discount on routine oil changes? Provide a free loaner to make the service more affordable so the customer isn’t so reluctant to schedule that appointment? Even if a customer doesn’t go for the offer, the gesture will help keep the dealership or service station top of mind and prevent mindshare loss.
Meanwhile, if all the direct mail or email promoting the program does is describe the offer, the marketer has missed a key branding opportunity. To make sure the messaging engages hearts and minds — not just wallets and pocketbooks — look for the consumer Point of Truth. In this case, incorporating a P.O.T that speaks to the customer’s financial fragility would add tremendous value. Marketing offers that utilize a strong P.O.T. will demonstrate empathy and reassurance which will ultimately win brand loyalty more than the savings.
Keeping ongoing channels of communications open
Uncertain economic times often result in fallout as struggling companies either collapse or are acquired. For some, the resulting void in their marketplace can be a golden opportunity to take the pole position for when the economy rebounds. That said, it may be difficult to glean the customer insight and P.O.T. for driving the brand forward when there’s little or no money for focus groups or useful predictive research.
Shifting the role of social media channels from marketing delivery to customer listening devices can deliver the information and insight you need. Using these channels with the primary goal of generating dialogue, not sales, may seem counterproductive. In fact, it’s a way to encourage positive brand engagement while gathering first-hand consumer input for the next campaign or program.
B2B companies will get a more efficient return on their marketing dollars if they create tighter alignment between marketing and sales. Every conversation a salesperson has with a customer, even if the original purpose is to simply follow-up on an order or touch base with a prospect, is a chance to ask them how they’re doing and what they see on the horizon for their business. Creating an internal channel for sharing this feedback directly with marketing guarantees that the narrative or concept of the next brand campaign will support the customer’s Point of Truth. Furthermore, because the initial input came from sales, they will understand the genesis of the messaging and how it supports their customers’ needs.
Basing marketing strategies on data and direct customer feedback
It’s amazing, and not in a good way, how companies make broad-brush decisions to cut or stop marketing the moment economic headlines signal a downturn. Take the mortgage industry. It’s taken a brutal hit thanks to the double whammy of low housing inventory and eye-popping interest rate hikes. On the other hand, not all lines of business and not all geographies are equally impacted. Today’s data gives you the ability to surgically target homeowners who, for example, are sitting on hundreds of thousands of dollars of equity in their homes. Shifting marketing focus to home equity loans or lines of credit for funding a remodel or renovation is an opportunity to fill the pipeline void left by the sudden drop-offs in refinances and purchases. Another marketing pivot opportunity? Millennials are turning 40. This means there are approximately 72 million first-time homebuyers that need help qualifying for a mortgage. How do you market to them now, so that when inventory recovers and interest rates stabilize, you’re at the top of their list for financing?
Display price sensitivity while still delivering value
One of the mistakes often made by marketers in a shaky economy is to discount the price of their products or services. This is a slippery slope. Once a customer becomes accustomed to paying a lower price, they will be very reluctant to go back to the original one. Reducing prices can also ‘cheapen the brand’ in the minds of consumers and once that happens there is less reason to stay loyal. Going back to the auto industry, it’s important to acknowledge that money may be tight but in a way that builds your value as a service or product provider. “Yes, gas prices are higher, but the good news is that we’re here to help you get into your first hybrid or EV by offering you big bucks for your trade-in and a great financing rate.” Nowhere in that sentence is there a promise to discount the price of the vehicle. Instead, the narrative is about how to make a vehicle more affordable to buy and drive.
Identify your product champions and your product problems/misfits
Any time a company goes through a ‘reckoning economy,’ it’s an opportunity to sunset poorly performing products or services. That’s obvious. But how do you do it in a way that minimizes customer disappointment? It depends on the industry and type of products or services involved. If the products have a relatively long life, such as consumer electronics, the goal is to wean customers off of the model to be discontinued, and on to another device in your line-up. Treat the demise of the old product or service as a chance to change up your brand narrative and demonstrate how the company is responding to evolving customer trends and expectations by focusing on more successful products.
Finally, marketers should always find a way to turn trying times into a chance to be positive and reassuring. While effective branding and marketing require some level of understanding and empathy in good times and not so good times, nobody wants an ad or an email to remind them that things suck right now. Consumers’ hopes and dreams haven’t changed because of a downturn in the economy. Their need to care for their families and get enjoyment out of life is no less important to them. Sometimes all marketers have to do is tell customers you understand that. They’ll know you’re on their side.
Vashti Brotherhood is President of Incenter Marketing, a full service B2B and B2C marketing company. Vashti is a 30-year veteran of the national marketing and advertising industry who has won numerous awards for her expertise as a creative director and brand strategist.