Blogs From The Front – Money/Credit

Many liken business to war.  We “attack the competition.”  We “defend” our customers.  Our new product introduction will “gain a competitive advantage and kill the enemy.”

Going into the New Year there was a lot of rhetoric about the Great Recession; whether the economy is growing, and what to expect.  The TV talking heads, bloggers and analysts have had their say, often repeating what someone else has said or changing their opinion based on new information.

I found much of what was being said contrary to what I had heard or seen.  So, during the past last two weeks I went to the front lines and talked with multiple marketing colleagues, located in Eastern Massachusetts, about how they think 2010 will unfold.  Like front line solders, these people are fighting a daily battle with defined tactical goals, surprises and limitations. They have real life experiences to document what is going on.  These conversations have taken place in person and over the phone.  The companies represented range from a very small start-up to billion dollar multi-nationals.  The industries range from hi-tech to commodities and covered both products and services.

I covered 5 subjects: money/credit, customers, social media/networking, new product introduction and marketing functions obtained or offered as a service…function as a service (FaaS).

One of the most interesting finding was the commonality on some subjects.  I heard the same thing regardless of size of company, industry or offering.  The starkest difference, not surprisingly, was between young startups with no or few customers, and larger more mature companies with large installed bases.  Yet even here, there were commonalities.

The number one topic related to money, or the lack of it. I will discuss my findings on money/credit below.  Future blogs will cover the other themes.

 

The Lack of Money/Credit

Everyone I talked to bemoaned the lack of money; to carry out programs, launch new initiatives, upgrade capabilities, add headcount, etc.  While some were operating on budget numbers that were below 2008 levels, others were using OPM (Other People’s Money) to meet their goals and objectives.  Using OPM included scheduling late payments (beyond 90 days) to working with vendors to fund prototype models and deliverables.

In some of the larger companies specific product lines, which had promotional dollars in the past, are now included in corporate or “umbrella” campaigns, while in both large and smaller companies each component of a lead generation program is vetted on a strict ROI basis…resulting in fewer shows, mailings, etc.

It appears the dictum to “do more with less” has taken effect.  However, few of the front line troops that I talked to felt that they were really “doing more.”  They felt that they were, at best, holding their own and that the risks to their product, brand, image and market share is much higher today than 18 months ago.  Some quotes:

  • “We are losing our differentiation”
  • “Sales say the number of qualified leads is significantly below where it was even a year ago.  I agree with them but have no funding to change the process.”
  • “I have no discretionary marketing dollars”
  • “I spend all of my time thinking about the next 30-60 days…I don’t know what is going to happen in the second-half.”

My conclusion, biased as it may be by geography and small sample size,  is that the lack of funding is constraining marketing activity and will result in slow, minimal growth.  The “do more with less” approach has morphed into “hold your position, don’t lose any ground” position.  Flat “growth” from year-to-year has become the new measure of success.

There is no basis for extrapolating these findings to the economy as a whole.  Were I to do so, it would suggest that there are no marketing drivers in 2010.  Few, if any, companies are adding marketing resources, mounting new campaigns, or taking chances.  The tepid commercials during the Super Bowl seem to reinforce this thought.  And, without Marketing driving business, new economic growth will be slow and uneven.

I would be interested to hear about your experiences in operating to today’s tight economy.

Next up: Customers focus

Note that a core Fire Alarm Marketing service is helping companies direct their scarce resources for an optimum return.  Call if you would like to discuss how we can help you.

RHM   2/11/2010

1 comment to Blogs From The Front – Money/Credit

  • Excellent summary! Thank you for publishing your research openly.

    So where are the opportunities for Boston businesses to compete for new markets, improved margins, develop new clientele for services and extraordinary value for new products? Greater Boston is a perfect market to study as we enjoy international students participating in our economy, and an attractive culture mixing brick and mortar business and competitive business services across all industries.

    I look to the innovation centers developing communities serving small and large business globally. Our (local) innovation to solve the challenges you describe very well, may come next from fusions of high-tech here: aiding low-tech businesses around the world. Developing a culture of innovation is the key.

    Creating social networks is a trend that allows business people globally to find, communicate and start work on projects in seconds. I remember the days before cell phones, the pager and email. Contacting businesses to sell products and start innovating took weeks. Now the same process can begin in minutes if not automatically in some cases. This trend provides Boston businesses with new competition as well as new opportunities. High and low-tech businesses must develop a culture to rapidly prototype fusions of elements, and automate as many costly information-handling steps as possible.

    So that I don’t sound academic in my thoughts, there is one specific market I see in shape for massive improvements. The CEO/CMO of every sub 100 employee business in America is now looking at Web 3.0. Stated plainly, using social networks within a company domain rather than on LinkedIn, Facebook etc. Salespeople traditionally asked to parrot the standard-pitch in volume and stick to closing accounts, are now asked to publish, create micro messaging, think and innovate in harmony with the CEO/CMO’s vision. The receptionist more often is not only at the entry of a business, but alert companies feature him/her at the top of the Facebook page. There is quite suddenly no role not-important in delivering the vision and quality of a business.

    The entrepreneur in a business has found new methods, reasons and support to publish their intelligence to micro-communities of customers or partners who know them, or have similar interests. This trend will make some small firms larger, and some large firms smaller. The CEO/CMO must go outbound now with creating the culture to allow innovative social-cultures to grow. The ultra-small business, should have stated new procedures to capture images, social connections on business cards, find success stories in the field and get these connectors/content into the corperate or social mesh.

    Objectively stated as your findings I hope!

    Nathan Watt

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