Market to Succeed: Why Now is An Exciting Time to be in Marketing
‘Companies that rely solely on cutting the workforce have only an 11% probability of achieving breakaway performance after a downturn.’ HBR
Market to Succeed
2020 has been a crazy year so far. My guess is that we’re still in the quiet before the storm - rubbing our eyes as we come out of lockdown, not sure when we’ll have to scurry back inside and slam the door tight.
Uncertainty and unsettling news. Heath and economic crises. Deaths and layoffs. Ick.
So why do I say that now is a particularly exciting time to be in marketing? Budgets are slashed. Colleagues are laid off. The world is still pretty much on standby as we wait to see what happens next.
But marketing has never been more important. As businesses face existential challenges everything is at stake. We need a new vision for the future - because the old future will never exist. I think marketing has an important role to play in getting us to that new future. The mix of customer focus, creative thinking, boundary pushing and business acumen is exactly what's needed to shape this new future.
The experts and big consultancies all agree that to survive an economic crisis and thrive into the future successful companies need to strike a careful balance, which includes a focus on marketing to succeed.
As HBR describes it in Roaring out of Recession: ‘One combination has the greatest likelihood of producing post recession winners: the one pursued by progressive enterprises. These companies’ defensive moves are selective. They cut costs mainly by improving operational efficiency rather than by slashing the number of employees relative to peers. However, their offensive moves are comprehensive. They develop new business opportunities by making significantly greater investments than their rivals do in R&D and marketing, and they invest in assets such as plants and machinery. Their post recession growth in sales and earnings is the best among the groups in our study. ’
Marketing Can Take the Lead
Distilling it down there are three key areas where marketing can take the lead in navigating through challenging times:
Focus on Customers
‘It’s critical to track how customers reassess priorities, reallocate funds, switch brands, and redefine value.’ HBR
According to McKinsey’s thought piece, How marketing leaders can both manage the coronavirus crisis and plan for the future, ‘marketers—as the advocates for the consumer in every business—have a critical role to play as companies shape their response. Marketers will need to be fast and pragmatic to manage the crisis, while also being strategic on how to weather the downturn.’
HBR argues in How to Market During a Downturn, ‘During recessions, of course, consumers set stricter priorities and reduce their spending. As sales start to drop, businesses typically cut costs, reduce prices, and postpone new investments. Marketing expenditures in areas from communications to research are often slashed across the board—but such indiscriminate cost cutting is a mistake.
Although it’s wise to contain costs, failing to support brands or examine core customers’ changing needs can jeopardize performance over the long term. Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.’
2. Be operationally efficient
‘Companies that respond to a slowdown by reexamining every aspect of their business models—from how they have configured supply chains to how they are organized and structured—reduce their operating costs on a permanent basis. When demand returns, costs will stay low, allowing their profits to grow faster than those of competitors.’ HRB
Bain’s strategists conclude in Beyond the Downturn: Recession Strategies to Take the Lead that, ‘All companies must manage costs in a recession. Yet some accomplished this by ratcheting down spending on lower-value processes and reducing the volume and complexity of work. They viewed cost management as a way to refuel the growth engine for the next stage in the business cycle.’
3. Plan for recovery
Marketing isn’t optional—it’s a “good cost,” HBR
HBR suggests, ‘During recessions it’s more important than ever to remember that loyal customers are the primary, enduring source of cash flow and organic growth. Marketing isn’t optional—it’s a “good cost,” essential to bringing in revenues from these key customers and others.’
‘Still, company budget cuts often affect marketing disproportionately. Marketing communication costs can be trimmed more quickly than production costs—and without letting people go. In managing their marketing expenses, however, businesses must take care to distinguish between the necessary and the wasteful. Building and maintaining strong brands—ones that customers recognize and trust—remains one of the best ways to reduce business risk. The stock prices of companies with strong brands, such as Colgate-Palmolive and Johnson & Johnson, have held up better in recessions than those of large consumer product companies with less well-known brands.’ HBR
From my work with Kodak I experienced first hand the power of brand on sales efforts, read more here Sales Driven? You Should Invest in Brand for B2B Productivity.
McKinsey’s thought piece ‘How marketing leaders can both manage the coronavirus crisis and plan for the future’ recommends, ‘Start ideating now. It’s possible that entirely new businesses and business models will emerge from the crisis. Virtual-based revenue streams such as app-based services may have more promise, and new ecosystems and marketplaces are likely to appear. With uncertainty likely to be the norm for the foreseeable future, it will be important to develop a portfolio approach to launching initiatives, tracking, and reallocating resources based on how each performs. Marketers should act as a catalyst for action by bringing their insights and ideas to the rest of the organization to begin this discussion.’
‘In recessions, marketers have to stay flexible, adjusting their strategies and tactics on the assumption of a long, difficult slump and yet be able to respond quickly to the upturn when it comes. This means, for example, having a pipeline of innovations ready to roll out on short notice. Most consumers will be ready to try a variety of new products once the economy improves. Companies that wait until the economy is in full recovery to ramp up will be at the mercy of better-prepared competitors.’ HBR
Let’s Reclaim the Opportunity for Marketers to Lead and Drive Business
Being locked up is forcing us to do things differently and, I think, giving us permission to do things we know in our hearts are right - like slowing down and taking stock.
Let’s step off the treadmill that is spinning way too fast for just a moment. I don’t know about you but in the last decade I’ve witnessed a frenzy of creation of… well… stuff. In fact, the antithesis of the expert recommendations of focusing on the customer, being more operationally efficient and planning for success (or recovery).
I’m not saying there wasn’t amazing work along the way. I’m lamenting the fact that the marketing team ‘strategic plan’ has become an endless to do list. Folks are run ragged. But what does all this doing add up to? A good portion of the time teams can’t even get data back out of the business on how their activities performed. The rigorous focus on marketing strategy and expert execution has given way to getting on with doing a whole load of shit and hoping that some of it works. I’m all for being agile but that’s not test and learn! Marketers are becoming slaves to the digital tools that are meant to enable them and speed up delivery. Tool proficiency is more valued than strategic ability. I don’t care if you can use Hubspot with lightening speed if you can’t create or manage a sensible marketing plan.
In a Marketing Week study from last year 30% of outstanding marketers blamed ‘poorly defined brief’ as a key reason for campaign failure.
If this isn’t a damning condemnation of our out of control marketing treadmill then I don’t know what is. It begs so many questions: Why was a poorly defined brief executed? If there was a solid strategy and proper plan how could a brief be poorly defined? What data was used to justify going off strategy and plan?
Of course I know the real world answers and reasons why - because this is just what happens. The business says jump. We say how high. We execute against our better judgement and then are left holding the baby when the poor results come in. It is a painful cycle. So, let’s end it now. Let’s reclaim the opportunity for marketers to lead and drive business success.
Read more thoughts on real world marketing and how to get it all done.
It’s an Exciting Time To Be In Marketing
It’s time to invent, innovate, revisit and renew. We have already lost a lot so perhaps this gives us an opportunity to be bolder instead of safer. You can play it safe in the hopes that you’re not in the next round of layoffs but at some point you will be — unless you do something great and are part of changing the fortunes of your business.
I’m not saying be reckless. I am saying now is the time to stand behind your convictions and fight to do the things that you know are right. Things that will Connect with Customers, Make Your Business Work Better, and Move the Needle.
So, as I see it, now is a great time to be the best marketers we can be — because when you are down and there is nothing left to lose you can actually be at your boldest and most brilliant.
Want to discuss how your business can market to succeed, get in touch: katherine@torrencemarketing.com