Recession is a smart time for marketing

Marketing has become that bad M-word these days. With organizations going down the famous Maslow pyramid to protect baser needs, marketing is something that has become eminently dispensable. Is there still an opportunity out there amid all the doom and gloom?

Well, I sparked off an interesting debate last fortnight in my CMO Club blog : "Is the downturn an opportunity for some companies to invest in marketing?"; My view is that with large companies shying away from investing those big marketing dollars, smaller companies that have traditionally never been able to outspend or out shout the competition now have a great opportunity to be seen and heard by their target customers.

Here are my four reasons why you should loosen up your marketing purse strings now if you are a SMB

1. There is less noise out there now: With the big boys staying out of the game at least for a few months now, this would be a great time for SMBs to grab some valuable mid share with their customers. It is the time to go there with your messaging and be heard, be it on new media channels or traditional trade shows and events.

2. It is a good time to engage your customer: With not many of your larger peers vying for your customer's time, it is perhaps a good time to engage with your customer and build some great relationships. It is perhaps a good time to invite your customers to participate in industry surveys you can commission, set up thought leadership forums or invite them to speak at your events.

3. It is less expensive to run marketing programs now:  With large companies cutting down on spends, there is lot of marketing inventory that is lying open. Be it web ads, booths at trade shows or running a targeted customer event in a city hotel, this is a good time to get some great deals and stretch your marketing dollars.

4. It is the best time to work the ecosystem: Let's assume you are selling a product for bankers, then your ecosystem typically involves banking associations, industry research firms and analysts, trade journals, media and journalists that cover this space, trade shows and events related to the banking domain, thought leaders in banking, universities and professors who research and contribute to this space, etc. The ecosystem usually plays a critical role of influence in this industry and lean times are usually a good to reach out and engage with this ecosystem and its key constituents.

In marketing, as in business, it is critical to capitalize on opportunities that come your way and the downturn is one such opportunity where a bit of lateral thinking can give your brand distinct long term advantages.

I got an interesting post on this from a fellow member, pointing me to a 2008 research by a Harvard Business School professor on the same topic. Here are some excerpts from Professor John Quelch's research on ‘recession marketing' where he talks about where companies should be putting their marketing dollars during a recession.

Customer research: Instead of cutting the market research budget, Prof Quelch recommends that you need to know more than ever how consumers are redefining value and responding to the recession.

Maintain marketing spending: It is well documented that brands that increase marketing during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.

Adjust pricing tactics: Customers will be shopping around for the best deals. You do not necessarily have to cut list prices, but you may need to offer more temporary price promotions, reduce thresholds for quantity discounts, extend credit to long-standing customers, and price smaller pack sizes more aggressively. In tough times, price cuts attract more consumer support than promotions such as sweepstakes and mail-in offers.

Emphasize core values. Although most companies are making employees redundant, chief executives can cement the loyalty of those who remain by assuring employees that the company has survived difficult times before, maintaining quality rather than cutting corners, and servicing existing customers rather than trying to be all things to all people.

"Successful companies do not abandon their marketing strategies in a recession; they adapt them"- Prof Quelch

I have added my own list of ‘must do' stuff for marketers in a recession. These things don't take a lot of money to do and the pay-offs are significant once the market starts moving up.

Reposition: If you have been running a rat race with competition, this is the time to sit back, research your customers better, relook at your service offerings and reposition your offerings more closely with your customer needs.

Get your house in order: I bet you never had time to do any of this during the boom-times. Invest in getting yourself a new website, rework your sales collateral, create new presentations and spend time on strengthening your sales support engine.

A bit of lateral thinking can give your brand distinct long term advantages.

Invest in thought leadership: What's your unique industry point of view? If you don't have one, find one and start evangelizing this. Sign up for speaking opportunities, organize webinars, put out research papers and spread the word around.

Try marketing innovation: This is a good time to try innovative programs that don't cost much. Experiment with options like cross promotions, new media vehicles (We once tried painting New York buses in our team) and web 2.0 channels like Second Life or Facebook.

Finally, remember that you have a choice. You can either be intimidated by the recession and clam up or you can seize the opportunity to grow your mind share and market share. All the best

Vinod Harith is founder and director of CMO Axis, the first Marketing Process Outsourcing company. CMO Axis was recently nominated for the TATA-NEN Hottest Startups Award 

Issue BG95 Feb09