Making crisis-proof marketing work: 6 tips for practitioners
Whenever the economy is in turmoil, many companies get jittery and hit the brakes in terms of spending. Fair enough. But especially marketing is an area that often experiences instantaneous (and sometimes massive) budget cuts.
In our BANI* world, this is not only short-sighted but definitely the wrong thing to do, as marketing expert and Dean of the WU Executive Academy, Barbara Stöttinger, admonishes. The better way to proceed would be to do away with old habits and, at the same time, find the right mix between targeted cuts and smart reinvestments in activities that generate a direct ROI. Read on for the six best hands-on tips and tricks.
* Brittle, Anxious, Non-linear, and Incomprehensible.
Rampant inflation, rocketing energy prices, political instability, thrifty consumers: as soon as the cost pressure within a company is on the rise, everyone starts to scramble for ways to save money. “Something that we observe time and again is short-on-cash companies starting to make knee-jerk cost cuts in areas that, at the first glance, don’t deliver a direct ROI. And marketing expenses are right on top of that list. I consider this short-sighted and even dangerous because this strategy has been known to backfire and cause serious long-term consequences,” marketing expert Barbara Stöttinger warns.
Instead of bringing out the big guns and cutting a certain percentage of the budget across all channels, a new approach would be smarter: saving in a targeted way in areas where there is inefficiency and, probably, overspending, and reinvesting in areas that promise more potential for a long-term ROI.
Prof. Barbara Stöttinger
And this is where the skills, far-sightedness, and creativity of the marketing department are needed to increase a company’s resilience in difficult times with the necessary growth mindset and, of course, the support of the management.
Clever investments instead of cost-cutting in times of crises can pay off, as the example of United Airlines shows: much to the surprise of its competitors, the US airline launched its biggest ad campaign to date during the pandemic, of all times. This unusual measure paid off, though: in the past two years, United managed to significantly increase the number of passengers compared to other airlines.
Henry Ford once said: “A man who stops advertising to save money is like a man who stops a clock to save time.” A quote that is more valid than ever in times like these.
What is it that marketing executives can do exactly? Barbara Stöttinger provides an overview of the most salient tips and tricks for the first steps towards successful marketing in times of turmoil:
Instead of randomly cutting costs across the board, marketing executives should look into the details to get a comprehensive overview: how much is spent on which activities on which channels, in which media, market segments, and geographical areas, and how efficient are these activities? This information allows us to identify inefficient spending in order to either reallocate funds towards better-performing marketing channels with a high potential for growth or to log them as potential savings.
Now it is all about emphasizing the particular contribution to a company’s overall success that marketing brings to the table. Come to terms with the management on how to measure this contribution. It’s important not to define investments in marketing as (additional) costs but as a business case: marketing as the key to long-term success, especially in times of crises. Make sure to also define your top priorities as well as the strategies and tactics you will use to achieve them. Which specific steps do you have to take in order to reach your goals? Do you have all the data you need to answer this question? And do you have people with the necessary skills in your team to extract and analyze these data and draw the right conclusions?
If you want your plan to succeed, you will need to win over the entire managing staff. Especially the CEO and the CFO need to be caught up on your priorities, pledge their support, and keep their promises also as the year goes on. Better inside representation is called for: what is it that we at marketing do, and what are the benefits? Provide your colleagues with regular updates and all the information they need to understand which marketing measures work well and how they contribute to the company’s success.
Traditionally, marketing consisted of separate areas: brand building, for instance through TV commercials, and performance marketing as it is used to measure online activities. A lack of coordination between these two areas can have negative consequences as marketing departments focus too much on one activity and neglect the other. Best-case scenario: the activities remain uncoordinated, negatively impacting the ROI. Worst-case scenario: turf wars between the two factions cause budget and performance decisions that are not based on facts any more.
This is why full-funnel marketing is the future, considering performance across the entire funnel, i.e., from TOF to MOF and BOF. This allows us to combine the strengths of brand building and performance marketing through linked-up teams, measuring systems, and KPI in order to generate better results than any approach that focuses solely on performance channels.
Despite all technological progress, marketing continues to rely on creativity – and especially when times are tough, human creativity becomes particularly important. It is about telling a story and tugging at people’s heartstrings. The ability to do so will continue to play a vital role in the future. This is why you should always be on the lookout for creative minds to strengthen your team.
Go for new things and don’t shy away from drawing inspiration from the best practices and benchmarks of other industries. A recent example would be commerce media marketing, which integrates sales and advertisement to create a seamless experience for the final consumer. It combines elements of e-commerce (online sales of goods or services) and media marketing (use of various media channels to promote products or brands). Commerce marketing allows marketing experts to tie advertisement costs directly to customer purchases, improve target group appeal, and gain better insights into the target group.
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