We have watched highly talented leaders snatch market share in the middle of recessions. They followed four common strategies – they used precision marketing, digital engagement, good “go2market integration” and inspired innovation.
Google rose rapidly to become the dominant search engine during the 2001-2003 recession, thanks to superior technology and powerful viral marketing. Southwest Airlines survived multiple recessions due to its low cost structure and customer focus.
Apple’s iPod was introduced into a rapidly slowing economy but succeeded because of great design, customer understanding and a highly fragmented digital audio industry.
These stories run counter to the conventional wisdom about how and when to succeed in business. It is during the boom periods, we are told, that companies have the best opportunities to grow, invest, gain share, and position their brands for success.
Downturns are different. Companies with the nerve to expand face a shifting competitive environment. Timid rivals are hunkering down, cutting back on marketing resources and waiting for the next upturn to renew their efforts.
An organization has two options: to act conservatively, hoping to weather the storm, or to go on the offensive, viewing the recession as a prime opportunity to strengthen brands and gain market share.
How do winning leaders do it? In our experience, by using the following strategies:
An example of this strategy is the Dove “campaign for real beauty” by Unilever targets women who feel they fall outside the stereotypical “beauty norms” and invites them to join a conversation about redefining beauty.
In tough times, marketing precisely has the added benefit of greater efficiency. But it requires a deep knowledge of your consumers. Successful CMOs use the most powerful, detailed demographic and market data available to segment their potential audience as comprehensively as possible. The goal: to understand how various customer segments are reacting to tougher times and to find new areas of market opportunity.
If there’s one particular secret ingredient to marketing in this environment, it’s the use of every kind of new digital media. Consider Barack Obama, whose presidential campaign made startlingly effective use of the Internet and other digital channels such as text-messaging to promote loyalty and to communicate his message. Much of Obama’s success lay in his ability to use those digital channels to get close to his supporters, to gain intimacy and to make himself approachable.
Digital marketing has the great potential to build campaigns that can restore intimacy through a grass-roots approach, sending highly targeted messages and focusing on a young audience that will matter greatly in the future.
Combined with precision marketing, digital engagement not only allows marketers to send intimate, well-targeted messages to carefully segmented audiences, but to analyze in detail the response to those messages, which lets marketers fine-tune their campaigns. It’s also cost-effective.
It has been said that the job of marketing is to create demand and the job of sales is to fulfill that demand. In truth, this long-standing separation between sales and marketing has done little but create inefficiency and foster jealousy and competition between the two organizations. Marketing leaders allow no such division.
It’s more critical now that marketing and sales combine forces to “own demand.” Thus it isn’t about more closely aligning two different functions, but rather integrating them completely, transforming their separate missions into one strategic initiative with one common goal: to sell.
The Louis Gerstner era at IBM embodied this process: when Gerstner arrived, IBM was a sales-driven company riddled with independent product-oriented fiefdoms that never really understood the need to market to actual consumers. Gerstner swiftly broke down that culture, restructured the company around the customer and began marketing systems, and related services, to those customers depending on their real-world needs.
Tough economic times demand that everyone in touch with customers – not just marketing and sales, but customer service as well – understand that they are part of a bigger commercial machine, and that their job is to drive both the top and the bottom line.
In tough times, consumers are looking for value, and not just in terms of which brand is cheaper or which box is bigger. Consumers are also looking to connect more fully with companies and their products, to trust them and be inspired by them even when times are tough.
Marketing leaders in our experience don’t just give consumers the best deal – they give consumers a deal that they can trust and that will inspire them to live a better life.
Consider the plight of the financial services industry. So much trust has been lost so quickly that it is hard to imagine how they will recover. Here is where both inspiration and innovation matter. Through innovative marketing, a retirement services firm might work to redefine the financial value equation for its clients, shifting the dialogue from short-term performance to long-term security, and inspiring clients to believe in the firm’s solidity and central role in rebuilding their nest egg.
The good news is that tough times can provide a rare opportunity for you to advance your competitive position – if you are bold enough to seize it