I’ve just taken part in a very interesting webcast, hosted by Mark Stuart, Head of Research and Thomas Brown, Head of Insights at the Chartered Institute of Marketing. Particularly pertinent to SMEs, I thought I’d share the main points of the discussion (as I see them) with you.
Although the media is full of reports detailing how we are now formally out of the recession, growth is still very slow and insolvency/administration cases are still high – a scenario which is likely to continue for some time. Forthcoming public sector cuts in particular, are likely to have a huge impact on the economy and customer spend.
Still difficult times ahead, for marketers, then.
With many organisations, marketing is still being seen as a “nice to have” – a function which can be cut without having significant impact on everyday operations. In fact, it is marketing which drives the value of your firm and dictates your future success. It is vital that you maintain or even increase your marketing spend, to remain visible and keep communicating with your customer base, otherwise how do customers know to contact you?
“Customers don’t spend less in a recession, they spend differently”.
What this means is that customers won’t stop spending, they are simply more conscious about it, and are less likely to remain brand loyal. To stop them moving over to a competitor who is perhaps offering cheaper prices, you have to maintain the conversation that your products or services, although perhaps slightly more costly, in actual fact provide more value and will give the customer a better experience.
Research shown from the 1991 recession has proved that companies who maintain or increase their marketing activity during a downturn, are in a better position to recover quickly, when the economy improves.
You should never communicate panic to a customer in a downturn – in order for them to have confidence in your products or services, you must convey that you too, have confidence, both in the products/services themselves, and demand for them.
What companies can do is to look differently at how they communicate to their target audience. Turn a problem into a solution! This may mean, however, having to adapt the existing core offering to meet the new needs of the customer base. Thomas gives a great example of restaurants affected by the recession. With bookings down and customers choosing to stay at home, unsuccessful restaurants closed. Successful ones focused instead on a takeaway service, which ultimately, have proved to be extremely popular.
In addition, business owners should NOT instinctively look to reduce prices in order to remain competitive. Customers will learn to expect reduced prices, so you will lose your differentiation and find it more difficult to raise prices again. Instead, focus on the customer experience – your products or services may be identical to other companies, but what can you given in addition, that no-one else is doing? This can be as simple as offering coffee and biscuits when booking a holiday, or a garage returning a car to its owner at their destination, rather than having to pick it up from the garage. This, believe it or not, can make all the difference.
Latest figures show that a high percentage of companies understand the concept behind customer experience, but only a few have actual strategies in place to address it – you’re missing a huge opportunity for competitive advantage!
To help you think of some ways you can enhance your customer experience, think about what distinguishes a great brand – a customer will use a brand if they feel they are receiving added value and if by using that brand, it says something favourable about them as a person – it makes them feel good.
Where many companies fall down, however, is that they are delighted for the marketing team to convey this message, but do not train the rest of the staff to actively convey it effectively, so the branding is weak, is inconsistent and ultimately, fails.
Despite the popular myth, an upturn is a great time to launch a new product or service, with many business owners and marketers turning their back on ineffective, costly traditional marketing and instead embracing digital marketing, with 17% of companies surveyed now spending more on online marketing than traditional, and a further third planning to do so in the near future.
So why digital marketing? It’s less costly and is easier to tailor/personalise, particularly if you have an effective CRM system in place. Firing off emails to unknown consumers or businesses who may well not give a toss about your offering, is likely to signal a failed campaign and can damage your brand.
What’s viral marketing – a good example of viral marketing is the Cadbury’s gorilla. Everyone recognised the series of ads, they were distinctive and people TALKED about them, forwarding YouTube videos and clips to each other. To be successful, your campaign must be copyable and should never be censored – the main aim is to get it passed around and discussed, remember.
Social media (Twitter,Facebook, LinkedIn et al) is sadly still often used as a soapbox from which to shout about your brand. If you’ve been doing this with zilch results, don’t be surprised. These sites are simply platforms for you to engage in two-way conversation and build relationships (particularly encouraging brand loyalty) with your target audience, to be used in conjunction with other marketing tools. They also have the added advantage of giving you true, honest feedback very quickly.
Thomas felt that rather than using social media to drive users back to your website, this tactic is likely to change in future. He recommends instead, having your own presence on these “watering hole” sites, asking no commitment from users to go elsewhere, but speaking to them where they are already – much easier for them!
It is important to make good use of SEO/PPC and, Thomas feels, it is a myth that people will search for what they want (a view I don’t necessarily share). What we do agree on is that most people won’t ever go past page 1 of a Google results page, and many never go past the first half dozen hits – a handy guideline for SEO measurement. If you can’t afford the ongoing SEO effort needed to remain here, make sure you have an excellent presence on the social media sites. However, measurement of online campaigns shouldn’t just be about measuring visitors to your website, how many clicks you’ve had, your conversion rate and so on. Online marketing should be about building your brand profile, first and foremost.
Most firms interviewed felt that CRM is the best marketing tool to give an excellent ROI. The customer must always be the focus of an organisation.
Ultimately, to succeed in the upturn, organisations need to remain focused and innovative. Many many need to shift their focus from their core offering, diversifying slightly or even identifying a new growth area.
So, there you go – some points you may agree with, some you may not. What are your thoughts, with regards to the above discussion, either as a marketer or business owner?