How can marketers adapt to this challenging economic climate? Professor Don Sexton offers three keys to success.
Do not use an axe to make cuts
In a down economy, the worst thing you can do is make across-the-board cuts. If you go in with in axe, you will most likely make some real mistakes. Think more carefully where your outlays are. How do you determine what you get back from marketing expenditures? You must first understand the long-term value of your customers to you and the costs involved with finding and keeping them. If you go by your gut you will have a problem. This applies to which type of media to use, such as deciding between social media and more traditional types of media, and to whom you direct your marketing efforts.
Help your customers find value
Don’t just say “we feel your pain.” Think about what you can do to help and find ways to partner with your customers. For example, I recently heard about an auto dealership that will give you a loaner if you need to get to a job interview. It’s not a major outlay for the dealership but it shows they care about their customers. The point is not just the thought but the action behind it. What you do with your customers now will affect your performance in the future.
Marketers must also rethink how to delight customers. You want to satisfy customers but make sure the balance between costs and value is correct. Don’t cut costs so much that you are pulling down value to the customer more than any costs you save and don’t add value so much that your costs increase more than the additional value you are providing. We call this “value engineering.”
Perceiving is believing
Marketers need to be more transparent to consumers. For example, even if the $400 million that Citigroup reportedly spent on the naming rights for the new Mets ballpark is a good idea — and that is debatable — Citi still must consider how people will perceive that expenditure. Someone unfamiliar with how branding works and why such a move might make sense may wonder why their taxes (via bailout money) and fees/interest they pay the bank are being used to put a name on a stadium instead of helping them. That kind of perception can have a negative impact. No company is immune to such scrutiny. These days marketing actions are public and will be discussed. Companies should be sure that people are going to understand the motivation behind its actions. They really have to think about what signals they are sending with every marketing action they take.
Don Sexton is the author of Marketing 101, Branding 101 and Value Above Cost: Driving Superior Financial Performance with CVA®, the Most Important Metric You’ve Never Used.
Photo credit: Harlem Lands