Less Slash and Burn, More Measure and Learn
Janet Downes, Director, Downes Strategic
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’!
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
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?
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.