A 3-part look at the marketing options open to business leaders battling a downturn.
Part 3: The Middle Path.
In the hallowed halls of boardrooms and the vibrant corridors of marketing departments alike, the spectre of economic downturns often prompts tough decisions and even tougher debates. The heart of this dialogue usually revolves around one pivotal question: Should we cut back on marketing or double down?
On the one hand, we find marketing enthusiasts underscoring the dangers of surrendering market share and eroding brand recognition. Yet, simultaneously, voices from the boardroom echo cautionary tales of companies crumbling under financial strain, urging the need for austerity.
To marry these divergent views, we propose a balanced approach. Instead of taking an extreme stance, we argue for a sensitive, strategic, and data-driven approach to marketing during downturns.
First, we need to acknowledge the elephant in the room: the fear of financial instability. An economic downturn puts companies in a tight spot, and the story of Toys "R" Us stands as a stark reminder of the risks of reckless spending1. However, this does not mean we need to cut marketing altogether. Instead, we should focus on being strategic and measured in our spending.
One way to achieve this is by shifting to data-driven marketing strategies. Data-driven marketing allows us to understand the changing needs and behaviours of our customers in real-time2. In the fog of a downturn, where consumer behaviour becomes unpredictable, data serves as our lighthouse. It allows us to optimise our marketing efforts, ensuring that every pound spent yields maximum ROI.
While it might be tempting to shy away from ambitious campaigns, remember the tale of Coca-Cola and their loss to Pepsi3. The vacuum left by their marketing retreat was quickly filled by a competitor. This example underlines the importance of maintaining brand visibility, even in tough times.
However, it is also critical to ensure that our marketing strategies are sensitive to the times. It's not about shouting louder; it's about speaking in a tone that resonates with our customers. This could involve focusing more on customer retention strategies or providing value through thought leadership and content marketing.
In challenging times, cross-departmental cooperation is key. Marketing, Sales, Operations, IT, and Rev-ops need to pull together, working from a unified strategy. By leveraging data and prioritising sensitive, strategic marketing, we can navigate the storm without overextending our resources or risking brand obscurity.
To conclude, the decision to cut back or maintain marketing spend in a downturn isn't a binary one. It is not a question of bravery versus caution, but rather one of strategic foresight and adaptability. By adopting a balanced, data-driven approach, we can ensure our companies not only survive the downturn, but emerge stronger, more resilient, and with a deeper connection with our customers.
Ahlert, D., Evanschitzky, H., & Thesing, M. "Performance Implications of the Recessionary Marketing Strategies of Retailers". Journal of Retailing and Consumer Services. 29, 2016.
Provost, F., & Fawcett, T. "Data Science for Business". O'Reilly Media, Inc. 2013.
J. Scott Armstrong and Kesten C. Green. "Competitor-oriented Objectives: The Myth of Market Share". International Journal of Business. 12 (1), 2007.