Marketers are always under pressure, but it's amplified in a recession, as companies cut back on advertising budgets and consumers cut back on spending, squeezing them from two directions. Times are tough, but Optimedia CEO Antony Young has a blueprint for survival.
He is offering marketing executives his tactical strategies in a new white paper titled "Strategies in a Downturn."
Young is not trying to gloss over economic worries, stating upfront that "demand is falling. As a result, there is a higher level of scrutiny for marketers and their agencies." Indeed, some of his 25 suggestions deal with the internal coordination of marketing and other disciplines within corporate organizations, especially the fiefdom of CFOs.
He also addresses research--for example, noting that modeling tends to be less effective at predicting consumer behavior in times of economic dislocation.
Externally, the Optimedia report addresses changes in consumer behavior. Young cites Harvard Business School professor John Quelch, who noted that "price elasticity curves are changing. Consumers take more time searching for durable goods and negotiate harder at the point of sale."
Quelch has suggested a new category of consumer, "The Simplifiers," who feel they have too many possessions and "reject the marketer's continual pressure to spend more money on possessions rather than education, health care and social goods." But the Simplifier isn't rejecting consumption out of hand: "They want to collect experiences ... Dining out, travel, learning a new sport will prove more resilient than expected in the face of recession."
In the face of these trends, Young advises marketers to "double down on your current customers" by boosting customer loyalty programs and creating ad campaigns that recognize and thank existing customers.
In the same vein, marketers should invest in their most profitable customers. This involves segmenting and profiling the top tiers, then delivering offers that are most relevant to them. While this might seem obvious, a Forrester study found that only 43% of the top 60 companies "offer better service to profitable customers."
In terms of ad creative, "comparative ads are back," especially in categories that are flat or declining. Young claims "the only alternative is to grow market share by targeting your competitors' customers." He cites the example of a Dunkin' Donuts campaign which targeted Starbucks, claiming that the Dunkin's coffee tasted better. On the digital front, Young advises marketers to revamp their Web sites to be more user-friendly and service-oriented.