Saturday, October 11, 2008

Frugal Marketing for Foggy Economics

Given the current economic flux, marketers are (or should be!) concerned about how it will impact their roles and industries. Ways in which it is likely to impact firms are:

1. Companies feeling the pinch because of the global credit crunch will look for ways in which they can limit up-front investment and capital expenditures

2. As consumers and companies are uncertain about the economy they are likely to postpone discretionary expenditure
3. Even consumers and companies not (yet) impacted by the crisis are likely to be more agressive in seeking value and in justifying the returns of any purchases. They may not necessarily ask for lower prices or trade downwards, but they will ask more questions and measure benefits more tightly.
While we are waiting for the economic situation to become clearer, should a marketer continue as business as usual? Perhaps not. Here are some ideas of what might be useful:
1. Postpone big bang, discretionary, brand campaigns that do not directly impact purchase behaviour. Better to do this when the dust has settled and you are sure of your short-term positioning in the new economic scenario
2. Focus on emphasizing the value delivered by your service or product. Provide data on why it is a good investment. Offer third party benchmarking and audits of the value delivered.
3. Structure options that lower upfront investment and spread the payments through the usage period
4. Emphasize services or products that will reduce the consumers' expenses
5. Structure service contracts into shorter time periods, with an option to renew

Instead of wringing its hands and worrying about its budgets, marketing can be very useful in identifying strategies for companies to deal with the new economics and emerge stronger in the long run, when this down cycle (like all other cycles preceding it) too has passed.
And while we are waiting for the fog to clear, it is a good time to invest in building high quality content. In times of uncertainty, customers look for information on how they can deal with the situation and what are potential services and products that can help them. Marketers can also help in restructuring services to address the customers new needs.

And all of these can be communicated at low cost electronically. As customers try to reduce their travel, many are going online to seek answers. So being active on LinkedIn Answers, Facebook, Twitter and in the blogosphere is not just frugal, it is the most effective method.

Photograph: Courtesy of Thomas Hawk at Used under creative commons, attribution+no-commercial usage