CEO Strategies For Marketing In A Tight Economy
While most CEOs understand the importance of having the ability to navigate through tough times, overcoming challenging economic conditions can take its toll on the best of us, that is if we don’t have the right tools in place.
After all, the strategies that you used while the economy was flourishing and customers were “ready buyers” now have to shift as consumers more closely watch their own budgets to make ends meet.
Historically, the first reaction for some executives has been to cut their marketing and advertising budgets, but this approach is totally opposite of what’s really needed to keep their brands alive and to continue to drive sales.
While it’s always wise to contain costs where needed, and to prioritize how your marketing dollars should actually be spent, failing to spend dollars based on the changing needs of your customers, their current mindset and how your offerings can best serve them in this current marketplace could jeopardize you today and over the long-haul.
With this in mind, we are advising marketing leaders to:
- Understand the psychology of your customers during times of uncertainty: Effective marketing recognizes and shifts with changing customer priorities and mindsets. When they are unsure of what’s going to happen next, marketers should ask themselves, how can we position our product or service in a way that acknowledges their doubt and helps them deal with it? For example, if drivers put off regular car maintenance during economic downturns, what can you do to make them feel good about keeping their investment in tip top shape? Can you offer a limited time service discount or at least a free loaner? Be creative and always come from the consumer’s P.O.T. (Point of Truth).
- Keep ongoing channels of communications open – to understand what customers are and what they are not looking for in this current marketplace. Maybe you don’t have 20k to drop on focus groups in Q2. And quantitative online surveys can only give you, well, quantitative data. But you can still have meaningful customer dialogues via your social channels about their lives, what they need and don’t need from you and how your products/services could be improved. If you’re in a B2B space, how can you use the daily conversations your sales force has with customers to better understand where their pain points are during a slow economy? So, you can ideate and respond with solutions accordingly?
Perhaps the most important channel to keep open is the one that flows from marketing partners to the sales force. We have been very deliberate to build direct relationships with top sales people within our client environments. They continuously inform our thinking and narratives. We see this as a service differentiator for our marketing director client counterparts who count on us to take the feedback from their sales teams and shape it into strategies and narratives that will work.
- Adjust marketing strategies that align with data, insights and direct feedback so that you learn from what your customers are sharing.
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. Let’s take the mortgage industry. No question it’s taking a brutal hit from the interest rate hikes. On the other hand, not all business lines are being hit in the same way and not all geographies are equally impacted. Today’s data gives you the ability to surgically target homeowners who, for example, are sitting on a lot of equity in their home. 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.
Another example: Millennials are turning 40 which means you have approximately 72 million potential 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? The hard part is convincing a mortgage company that being patient will pay off if they just keep up a steady drumbeat until the economy eases and housing inventories normalize.
Equally important, how do you strategically adjust your marketing budget? Instead of cutting paid media across the board, use your data to make judicious cuts so you keep the outlets that are delivering for you and only eliminate the weak performers. Use analytics in your lead gen programs to test if you can reduce your cadence of customer touches without losing mind share. You can also use basic marketing data to shed light on which customer segments are truly impacted by economic swings so you can refocus your marketing dollars and sales initiatives accordingly. All of these are useful strategies during an economic downturn but only when constructed with intention and deliberately executed.
- Display price sensitivity while still delivering value – review product and service pricing structures and determine if adjustments need to be made to inspire purchasing.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 which, in the long run, could cheapen the brand. Instead, the narrative is about how to make a vehicle more affordable to buy and drive.
Right now, supermarket shoppers are flocking to house brands to save money. The trick is to make them as good as or superior to premium brands so that when the economy gets back on track, consumers are more likely to stick with the house brands. Supermarkets must also accept that people portfolio shop in times like these – in other words they’ll go to one supermarket for eggs that are $1 less per dozen and another to purchase meats or poultry. Creating weekly pricing discounts within the same section of the store will help mitigate portfolio shopping, ensuring the store retains more share of wallet in the dairy aisle (for example) on a week-to-week basis.
A good way to think about it is that a win for customers during economically challenging times is being able to continue buying the goods and services that allow them to maintain their quality of life. The irony of the market we’re in now is that inflation is being caused by consumers continuing to spend, spend, spend. With few exceptions such as grocery, gas and home energy bills, consumers are not feeling the pinch. Or at least not yet.
- Identify your product champions and your product problems/misfits – decide what is in your product or service mix that needs to stay and what needs to go based on the current economy.
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 changing customer trends and expectations by focusing on more successful products.
- Make sure your marketing promotes the “caring economy” by demonstrating to customers that you care and want to maintain a personal and engaging connection with them.
Marketing should always do this. Not just when people start to worry about the economy. All effective branding and marketing require some level of understanding and empathy in good times and not so good times. That said, nobody wants an ad or an email to remind them that things suck right now. Use your marketing to let customers know you’re there for them but keep it positive and forward-looking. Their 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 you have to do is tell them you understand that. They’ll know you’re on their side.