Marketing in the down economy
Reinforce don’t reinvent
By Barry Vucsko
May 28, 2009http://rblb.wordpress.com
Marketing in the down economy
Marketing’s Fate Intention & Expectation
Reinforce don’t reinvent
How we process messages Reinforce Don’t reinvent
Social Media
Marketing in the down economy.
In an Epsilon study, 94% of CMOs and other marketing execs agreed with the statement:
“A tough economic period is precisely the time when marketing plays a key role”
Average tenure for a CMO: 18 months
Marketing’s Fate
As unique as this recession/depression is,
Its result on marketing is, unfortunately, nothing new.
Marketing’s Fate
Marketing’s Fate
Cutting back on “non-core” functions--anything that doesn’t
design, build or distribute the widget
Marketing’s Fate
Cut backs on marketing communications (brand strategy, advertising, promotion,…)
Marketing’s Fate
Marketing Communications is a lifeline How a company announces new productsHow they converseHow they educate about their productsHow they build their brandHow they create loyalistsHow they understand their customers
Marketing’s Fate
Marketing Communications is a conversation, cut it short and customers will forget what
you were saying
Intention and Expectation
Intention: Your customer’s desire or need to
buy your products.
Expectation: What they think about, or expect
from, your product. Expectation is BRAND.
Intention is Waning
This economy is killing or changing intent.
Customers are tuning off
They’re in saving mode
They’re looking for alternate (often cheaper) solutions
Putting things on hold (“wait and see” attitude)
Four Types of Intent
Status Quo Intent
Price Competitive Intent
Postponed Intent
No Intent
Expectation is BRAND
The more customers expect of a brand the more supported that brand becomes.
Expectation is BRAND
Customers expect things based on:Brand HistoryBrand PromiseBrand’s relation to its competitionMarketing Communications
Marketing Communications builds expectation
Decreasing marketing communication
Decreases expectation
Intention/Expectation Equation
Waning Intention
+
Reduced Expectation
=
-(I)+-(E)=
Intention/Expectation Equation
-(I)+-(E) =
Reinforce don’t reinvent
How we process marketing messages
Most psychologists and educators espouse that we learn new things by relating them to past things.
When brands reinforce their message, they are aligning past and present
This alignment strengthens the brand and creates reference points.
How we process marketing messages
Brand Messaging
Short-term Memory
Long-term Memory Store
Product Evaluation
Beverage
Soft Drink
Coke Pepsi, 7Up
Stored as “networks” of associations
ST activates LT store based on frequency, recency and elaboration
*Sternthal & Lee, 2005 Northwestern University
Expectation
Our minds are like old buckets.
Brand communications fill those buckets
Customer expectation IS your brand.
They increase expectation.
If you don’t fill them they go dry
The wood cracks
They get kicked over
People use them as a place to store mops, sponges and dirty rags
Buckets leak.
It takes a lot to fix and fill that bucket.
Acquiring new customers can cost 5 times more than satisfying and retaining current ones.
Murphy & Murphy, 2002, Leading on the Edge of Chaos
A 2% increase in customer retention has the same effect on profits as cutting costs by 10%.
Murphy & Murphy, 2002, Leading on the Edge of Chaos
A 5% reduction in customer defection rate can increase profits by 25%-125%, depending on
the industry.
Murphy & Murphy, 2002, Leading on the Edge of Chaos
The average company loses 10% of its customers each year.
*Murphy & Murphy, 2002, Leading on the Edge of Chaos
This is not a normal recession.
REINFORCE
Strategic Reinforcement
Elaboration of recognizable
product characteristics and messaging.
Strategic Reinforcement
1. Reinforce where needed most
3. Reinforce often
5. Reinforce in the same ways
Don’t Reinvent
Don’t Reinvent
Waning intent, diminished budgets AND new messaging will harm your brand
NO Porsche Every Day Low Prices
NO Nike Orthopedic Shoes
NO Hershey’s Lager Beer
Don’t Reinvent
Reinvention only as a last resort and as a corporate, rather than marketing, strategy
Don’t Reinvent…Unless
Dying industriesDying brands
Changing technologyChanging generations
Stay Connected
Don’t stop listening.
Know the marketplace
Know your customer--research to learn who they are and who they are becoming
Know their worth--perform Customer Lifetime Value analysis
These will tell you if you need to reinvent.
Tactical Reinforcement—Social Media
Social Media Blogs Networks (Facebook, Mixi,
LinkedIn, Twitter etc) Wikis Forums on existing site
Knowledge Networks survey:
“Less than 5% of social media users regularly turn to these sites for guidance on purchase
decisions in any of nine product/service categories.”
Knowledge networks survey:
“The largest percentage, 54%, said that
“staying connected” is what they like most about social networking sites.”
Bebo.comBlackplanet.comCafemom.comClassmates.comClubPenguin.comDel.icio.usDigg.comFacebook.comFlickr.com
Friendster.comHi5.com
Imeem.comLast.fm
Live.comLinkedIn.comLivejournal.comMyspace.com Myyearbook.comNing.comPicasa.comPlaxo.comReddit.comReunion.comTagged.comTwitter.comYouTube.com
How to use social media wisely
Don’t throw tactics at your customer
Social Media should NOT replace advertising.
It’s a PR tool
Figure out your marketing goals
Can Social Media help you meet these goals?
Know your Social Media users
Creators
Critics
Collectors
Joiners
Spectators
Inactive
Li & Bernoff, Groundswell 2008
IF..social media is the right choice…
1. Use it for cheap, easy PR.
2. Keep the conversation going
3. Stay on brand
How to use social media to reinforce
Right Brain/Left Brain Marketinghttp://rblb.wordpress.com
How to market in a downturn2009, Quelch & Jocz for HBR
Turning adversity into advantage: Does proactive marketing during a recession pay off?
2005, Srinivasan, Rangaswamy, Lilien
Recapturing lost customers2004, Thomas, Blattberg, Fox
Further Reading