Brands like Apple’s iPod, Microsoft and Disney were all launched during a recession and are examples of the success of positive marketing. The notion of maintaining or increasing marketing spend in order to create awareness, enhance reputations and build profit is also supported by numerous studies.
There are other reasons for treating an economic downturn as an opportunity, since studies have shown that an increase in marketing spend during a downturn increases market share in both the business-to-business (B2B) and consumer sectors. B2B companies that maintain or increase marketing spend in an economic downturn achieve higher growth both during the downturn and for three years after, as shown in figure 1. Conversely, companies that cut spending take longer to return to their pre-downturn market share.
As competitors weaken their marketing focus, it is an excellent time to pick up disenfranchised customers and deliver a knockout blow to rivals, whilst strengthening the influence on key stakeholders in the company, for example customers, suppliers, regulators and industry influencers such as media and industry associations.
An organisation’s brand equity needs to be continually invigorated. Communicating about an organisation – its values and its work – is seen as an important way of doing this. The company states that creativity will give it more of an edge than in ‘normal’ times.
In addition, it is important that current organisational stakeholders have their belief in, and loyalty to, the company reaffirmed. An economic downturn is an excellent time to enhance existing relationships. Being positive helps to keep and make new friends, with proactive marketing an example of remaining positive in a tough environment.
There are any number of marketing initiatives that can deliver quick, meaningful marketing wins. These include:
* Refining customer and potential customer databases, then disseminating either hard copy or digital newsletters;
* Holding customer events that add value to their professional knowledge, with your company being the much appreciated ‘helping hand’;
* Having your leaders speak at important industry conferences; and,
* Initiating a digital communication program that could involve your leaders writing a blog, producing an e-newsletter or reaching out to influential online commentators.
None of these options need be overly expensive, which is key when budgets are being scrutinised. Along with cost, a return on investment (ROI) is the other key driver behind satisfaction with marketing spend.
A focus on ROI underlines the necessity to apply modern business’ greatest value marketing tactic – that of a public relations program as part of an integrated marketing approach. Public relations include all of the programs noted above and more. Media relations, specifically, include the generation of issues and topics that the media might want to interview the company about and write articles on, case studies of work undertaken or opinion pieces on industry-relevant topics from company leaders.
Howorth is part of the Ogilvy Public Relations group, which has worked extensively with Origin Energy. There are a number of reasons why a media relations campaign can be cost effective and deliver excellent ROI, such as:
* It enables companies to reach a large number of stakeholders;
* By focusing on specific media, it enables companies to ‘smart-bomb’ priority stakeholders;
* It gives companies an opportunity to take a leadership position on relevant topics and differentiate itself from competitors;
* The credibility built by being written about and associated with a reputable media outlet;
* The media is a great stimulator of word-of-mouth endorsement, arguably the most persuasive form of communication; and,
* It is one of the least expensive of marketing activities that companies can undertake.
A further factor underlining the importance of establishing a leadership presence in the media is the influence that the latter has on how much people trust a company’s brand. Increasingly, decision makers are looking to their favoured media to reinforce trust in their existing brand preferences, and to guide their product or service purchasing decisions. The current economic situation will only deepen their reliance on the media.
While you may apply a strong media relations campaign, it is also important to examine the ROI you currently get from any advertising program.
Your marketing budget might be under pressure, but now is not the time to cut out this important brand-building marketing tool. Instead, stand back and objectively examine the returns you get from your current advertising. Are you getting value for every advertising dollar spent?
Take a hard look at where you are advertising; ensure they are all publications that your customers read, know and trust as reliable sources of information. It may also be a useful time to look into cost effective online advertising.
It is also vital that you review the messages you are communicating in your advertising. Research shows that well thought out, well presented advertising in the right media streams can sell up to 20 times more than just average advertising. So don’t be tempted to cut back on production costs; there may be a short term cash gain, but remember it is much harder to sell a quality brand or product with a cheap-looking ad that contains mixed messages.
The opportunity to stake a claim in an environment looking for organisations to provide strong leadership, reliable and value-driven products and services, and show that they clearly value their customers and other stakeholders, will not last for long.
The economic downturn is not all bad. Companies that stand tall now would cast a longer, deeper shadow than they will in a booming economy.
