6 Recommendations For Marketing In Austerity

This is the sixth is a series about how the CMO should plan for 2011.

Austerity –noun, plural -ties.

1. austere quality; severity of manner, life, etc.; sternness.

2. Usually, austerities. ascetic practices: austerities of monastery life.

3. strict economy.

(http://dictionary.reference.com/browse/austerity)

A day doesn’t go by without a news report of austerity measures being imposed; cutbacks in social programs in Greece, raising the retirement age in France, cutting services in Ireland, etc.  Some have interpreted the recent U.S. election results as a mandate to decrease spending and embrace a more austere economic environment.

How does this impact the CMO in planning for 2011?

  1. Position and Messaging.  When times are “tough” images of solidarity, trust and longevity resonate.  Messages that convey these images, whether visual or in words will appeal in both the B2B and B2C markets.  Integral to the messaging is simplicity, i.e., a clear direct explanation of the value proposition.  For example, “saves money” has a stronger impact than “a meaningful buyer experience with long term economic benefits.”
  2. Choices. Some studies have shown that too many choices confuse buyers.  On the other hand, product line extensions allow for different segments to be served.  A strategy of offering the traditional Good, Better, Best can resolve this issue.  Sunsetting the Basic and Ultra offerings lessens customer choices and may reduce overall costs.
  3. Quality. When buyers, both B2B and B2C, have fewer dollars to spend they will increasingly look toward optimization, whether it is longevity, multiple usage or increased service. Products that are perceived as quality products will gain market share.
  4. Image. If everyone perceives that they are living in a strict economy, lavish and over-the-top displays will ruin any messaging or positioning.  News reports or coverage about employees (CEOs or others) enjoying the high-life will impact buying decisions.  Reports about counting paperclips and pencils will show that the company is working along with everyone else.  It also reinforces the trust image.
  5. Over deliver. I buy wine through the Internet.  The shipments come 3-4 times a year.  The most recent box (12 bottles) arrived the other day.  In unpacking it I found that 6 wine gift bags had been enclosed, at no charge.  While this was not an altruistic move by the vendor, as the more wine I give away the more I might buy, it showed that they recognize the season, the potential that I wouldn’t have a gift bag and acted to fill that need.  They over-delivered. In austere times vendors who over deliver build customer loyalty and more sales.
  6. Acknowledge Risk Avoidance.  In austere times buyers will work to minimize risk.  This is not to say that they will always take the easy decision, i.e., we will go with IBM/Google/Apple because no one ever gets fired for buying IBM/Google/Apple, rather they will look to vendors to insure them from any risk in the decision process.

Studies done on companies that lasted through the Great Depression show that those that spent on Marketing were more successful than those who cut back on Marketing expenses.  Key to the recommendations above is continued expansive Marketing expenditures in order to maintain and grow mind share.

As CMO are you planning for an austere 2011?  Does your positioning, messaging and image reflect the changing environment?  Are you over delivering on your products and services?

RHM  11/18/2010

1 comment to 6 Recommendations For Marketing In Austerity

  • Jim Matorin

    Bob:

    #5 really resonated for me. Not only were you surprised, but look at the positive buzz the wine company generated since you wrote about it, thus probably told some people as well.

    Jimmy

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