Your business is facing new challenges this year? The recession is forcing you to re-structure? You want to work smarter? Still you need to launch new products, expand into new channels or grow into new markets. Your competition is tough and you need to keep innovating, you need to be more creative. A traditional reaction in times of economic downturn is to cut costs and slash advertising expenses. But often it proves to be a quick fix and then a setback in the long run at the expense of your Brand Equity.
In a recession more than any other time, you need to sell “better” and resist price erosion pressures as much as you possibly can.
Here is my 2cts contribution to what I think one should do in times like this.
Review your processes and ask yourself if your marketing does this:
- All your activities are aligned and match the sales cycles and the needs of the markets you are working with.
- Your brand communication is strong, meaningful and consistent with your history and your business strategy.
- Your brand strategy adds value to your product(s) and you are able to retain a price premium that will save you from cutting already thin margins.
- Your in-store presence reflects who you are (brand), what you want to say to consumers (Call to action) and gives you a true competitive edge in the last mile.
- Your Channel partners value your efforts and fully support your product(s).
If not then you need to start reviewing and changing the way you spend your marketing money.
- Look for smarter ways to do what you are doing with traditional methods, don’t discard the possibility of investing more to reduce cost later. For example, does your business use Social Media? Have you run viral campaigns before? Do you advertise on the net? Often these prove themselves more cost efficient.
- Slash the fluff. Instead of cutting the big blocks cut the small stuff that feels unnecessary. You will probably feel like it is small money and maybe the returns are good for the small amounts – still you need to rethink the whole plan and find consistency across the board. Often (not always) those small projects/campaigns add up and dilute your message into too many directions.
- Check if you can merge and connect several smaller campaigns into one big one that can last longer and drive sales better. Look for economies of scale. Sometimes putting everything under one big umbrella campaign helps to give the impression that you are actually doing more despite doing less... you’re just working smarter. Give your campaigns a theme that isn’t time dependent... by that I mean that they won’t become obsolete too fast and need a revamp.
- Take the big chunky expenses and review what they achieve. Ask yourself how well those big campaigns/projects help your bottom line. Are they key to claiming a price premium for your products/services = do they increase / strengthen your Brand Value? Check if that can be improved further and if you can get more direct sales drive out of the expense – try connecting smaller operations to it under one umbrella as one big theme.
There is no magic recipe. Often, you just need to cut a good campaign budget because you simply do not have the money for it. That’s life. But with the above tips, I hope you can take a fresh look at your budget and avoid what happens too often. One cuts what is easier to cut, not what should really be cut.
Consequences can get more expensive than the savings they represent at the time. Brand Equity takes time to build and can be destroyed very fast. A brand can devalue itself very quickly by engaging into behaviours consumers would not expect of it.
If you ever have to cut your price or do some “silly” discount scheme, make sure it looks like the channels / retailers have done it... not you (sorry guys). Consumers accept that retails suffer in a downturn and will look to clear stock for example. They just expect to grab a bargain. That should not affect your Brand equity as much. Stay away from branding your discounts and support your channels - they’ll surely appreciate you for it.
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