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Less Slash and Burn, More Measure and Learn

Janet Downes, Director, Downes Strategic Marketing

Many organizations face tough challenges in the current economic environment. The knee-jerk reaction is to cut costs, anywhere that doesn’t immediately reduce cash flow, and the marketing budget is often first in line. How can you reduce costs without endangering longer term business interests?

This was the topic of a recent presentation given to the branch by Janet Downes of Downes Strategic Marketing. Janet delivers courses for the IoD and is the IoD’s Member ship Marketing Advisor. For those of you who couldn’t attend here are some of the ideas which were presented.

  • A more considered approach is required. ‘Ready, aim, fire’ rather than directionless ‘fire, fire, fire’!
  • Change your mindset from good times to tough times. Avoid being a victim of the boiled frog syndrome. If your market is changing you need to react fast.

Downturns are times of structural change with more opportunity to improve the position of your business. Research shows that companies in the bottom quartile of their industry are more likely to move to the top quartile during a recession than when times are good. And visa versa. Recessions speed up the adoption of cost saving, innovative products and services, which can be ignored when budgets aren't so tight.

There are always winners and losers. Dell has surpassed the rest of the PC industry during the current IT recession with increased promotion of lower cost products. Budget airlines outperformed full service airlines post September 11th.

  • Measure and review your current marketing, sales and business development activities. Work out where you are spending money. Ask yourself - why are we doing this? Are you getting the results you need?

Lord Leverhulme, founder of Unilever, famously said, ‘Half of my advertising is wasted, and the trouble is I don’t know which half.’ This is your opportunity to develop the habit of identifying what does and doesn’t work and focusing your spending on activities that support the customers and markets you are targeting.

  • Do you have the relationships you need with customer organizations and individuals? Who are your most valuable, most growable and least profitable customers and within them who are the VIPs you need to keep in touch with? Align spending and actions accordingly.
  • What do customers value about your organization? Is their perception of value changing in the downturn? Are competitive or other market forces changing the ground rules in your industry?
  • Implement the changes from your review. You must be ruthless about terminating habitual marketing spend which shows no measurable results. But don't be afraid to invest more in activities which promise an upside benefit in the short term.

Evaluating marketing isn’t always easy but it is possible. If you don't have numbers and financial data, then use estimates. Recessions are a wake up call to measure and control your marketing more effectively. And the benefits will remain long after.

Downes Strategic Marketing has a recommended process for carrying out the type of review discussed in this article. For further information on this topic contact us by email or phone  - +44 (0) 1273 891 050.

 
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